How E-Wallets Fees are Charged: Every Step Of The Process

An e-wallet is a prepaid online money account that is accessed via a mobile app or desktop, which allows a user (an individual or a merchant) to deposit and store money (which then becomes e-money) for future online transactions, with the option of later withdrawing it. This, however, does come with fees charged by the e-wallet service provider which the e-wallet user needs to keep in mind. 

Whether they’re using STICPAY, Skrill, Neteller, EcoPayz or Payeer, this article intends to help e-wallet users understand what they should be on the look out for when it comes to e-wallet fees, so that they can use their e-wallets for online shopping, forex or crypto trading, or gaming, without worrying about unforeseen costs.

How the flow of transactions for e-wallets work

Below is an example of an e-wallet process diagram, showing user-to-merchant transactions and vice versa. For user-to-user transactions the process looks much the same, and the process flowchart looks very similar across all e-wallets. Different steps in the transaction flow have associated fees, but the details of each step differ between e-wallets.

Step 1: Account authorisation

To sign up, a user or merchant creating the e-wallet account is usually required to submit documents proving their identity in order to authorise their e-wallet account. The list of required documents depends on the platform but normally includes: 

For users: 

• Proof of legal identity (driving license, passport, etc.)
• Proof of address (government issued residential registration, etc.)

For merchants: 

• Certificate of incorporation
• Company proof of address
• Corporate structure 

There are usually no e-wallet fees charged for during this initial account authorisation step, as most e-wallet services let users set up accounts for free.

Step 2: Deposits

Once your account has been authorised, it’s time to deposit money into it for future transactions. Each e-wallet has its own base currency, which acts as the default currency for the account. When a user converts money, their local currency is calculated against the base currency. 

Users can open e-wallet accounts in local currencies. For example, Skrill and Neteller have 38 and 36 local currencies respectively, while STICPAY offers 25 and EcoPayz offers 53. However, there are still e-wallets with limited currency accounts, for example, UPayCard is only available in Israeli Shekels, Euros and US Dollars. 

Furthermore, each e-wallet offers its own range of deposit methods, normally including:

• Local and international bank wire
• Visa and Mastercard
• Crypto
• Other e-wallets
• Prepaid cards

The service fees charged by e-wallets for deposit transactions depend on the deposit method chosen. Larger e-wallet providers usually offer the same rate for all methods, while smaller e-wallets such as STICPAY offer a variable rate, for example, 1% for bank wire and crypto desposits, 3.85% for Visa and Mastercard deposits, and 1.5% for UnionPay.

Other deposit-related fees users need to be aware of include bank wire service fees and conversion fees. If you choose to make a payment via a bank wire, local and international banks may charge their associated service fees, which are not normally covered by e-wallet service provider costs.

In terms of conversion fees, if you make a deposit from your e-wallet account that is different from the base currency of your account, you may be charged an e-wallet conversion fee. Additionally, you will also likely be subject to the exchange rate set by the payment platform you are using to complete the deposit (e.g. Visa or Mastercard). 

E-wallet conversation rates are different from one e-wallet to another and depend on the agreement in place with the payment provider. For instance, Skrill and Neteller charge conversion fees that are almost two times higher than STICPAY. In such cases, local bank wires can be a more cost-effective option, as they are mostly fulfilled without a conversation rate being charged.

Step 3: Internal transactions 

After making a deposit, the user or merchant can make transactions internally in the e-wallet ecosystem by sending or receiving money from user to user, or from user to merchant or vice versa.

Internal transaction fees include internal send and receive fees and currency conversion fees. Internal send and receive fees vary betwee e-wallets and depend on each e-wallet service provider’s business model. Exact fees are difficult to determine, but users can guess approximate fees using the calculators available on most reputable e-wallet websites. 

Currency conversion fees can be charged at this stage of the transaction process, if the deposit currency differs from the currency of the recipient’s account. 

Step 4: Withdrawals

When it comes to withdrawing money from your e-wallet, the fees applied depend on your chosen method of withdrawal. The mechanism is essentially the same as that for deposits, but the fee amounts are different.

Depending on the withdrawal method and the agreements in place between the e-wallet service provider and the payment provider, withdrawal fees can vary from anywhere between 0% to 8%. Again, like with deposits, bank wire service fees and conversion rates can apply for withdrawals made via bank wire, or in a currency different to that from the e-wallet. 

Other e-wallet fees worth noting

 

Besides these fee types discussed above, it’s important for e-wallet users to pay attention to additional fees on e-wallet platforms. For example, e-wallets like Skrill and Neteller charge users for inactivity on the platform - accounts are free for personal use, as long as you log in or make a transaction at least every 12 months, otherwise inactivity fees can apply. STICPAY, on the otherhand, does not charge for platform inactivity. 

 

Additionally, each e-wallets service provider has its own business model and technical ecosystem, which can influence the fees they charge. For example, while some e-wallets have their own technical resources in-house to support their platform, others may rely on third party technical support. 

E-wallets also have different contractor relationships in place for fulfilling local bank wires, which serve different country groups and have different agreements in place for how deposits are made and, subsequently, the kinds of fees that are charged. It’s worth investigating these considerations when looking to adopt an e-wallet service, as the provider you go with may have more fees than you’d initially expect. 

Summary

Understanding the e-wallet transaction process is integral to understanding what kinds of fees you can anticipate from your e-wallet provider. With some research and inquiry, you should be able to tell exactly what fees are incurred at which points in the process, and this can help you make the right choice of e-wallet that aligns with your needs and your budget. 

If you’d like to find out more about STICPAY’s e-wallet fees, or to open your STICPAY e-wallet account, contact us now.

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