The fact that digital payments have increased tremendously over the last few years is not breaking news. The advancement of technology has made things easier for the mobile user and when it comes to payments, digital wallets are the key driver in this development.
Digital wallets are just what they sound like: Digital versions of financial accounts that reduce the need to carry a physical wallet. They allow customers to simply use their mobile phones instead of cards or cash to pay. Once the card is connected with the digital wallet, customers can use it in various ways - for online shopping, contactless payments, in-app payments and to withdraw money from ATM machines. This article is going to discuss everything you as a merchant needs to know about this trend and how digital wallets can benefit your customers.
The rise of digital wallets
Digital and mobile payments are on their way to be the universal standard for payments. Following the 2019 Mobile Payment Market - Growth, Trends, And Forecast (2020-2025) by Mordor Intelligence, digital wallets will surpass debit cards as the most common payment method by 2022.
While mobile devices, especially smartphones, have long been a stable commodity for individuals, the demand for contactless payments has increased especially through the influences of the Covid-19 pandemic. Younger consumers such as Generation Z and Millennials are turning away from traditional payment methods and opt-in for new solutions such as buy-now pay-later methods and digital wallet apps instead. Given the general changes in lifestyle, the rise of online retailing and the cashless economy coming sooner than initially expected, digital wallets are a must-have option for merchants these days.
Benefits of digital wallets
Digital wallets offer a whole range of benefits. Just to name a few:
- Simple usage and process. Digital wallets allow quick and easy transactions from one account to another just with a few taps on the screen. Memorizing and re-entering card details are not required.
- Transaction speed. Transactions via digital wallets are the most seamless ones and can happen within the blink of an eye.
- Secure transactions. Being secured with encrypted protection, digital wallets store all information users need within a compact and secure form.
- Maximal flexibility. Users can accept payments and transfer money in different currencies. They can add funds or withdraw money instantly and any time without having to seek permission - just as a physical wallet.
Are digital wallets safe?
Questioning the safety of digital wallets is a decisive factor for people not to use one. Consumers might prefer debit or credit card payments over digital wallets because it offers them a certain level of protection through their bank or credit card company - in most cases cardholders are not liable for fraudulent purchases. However, digital wallets include a certain physical level of protection that is not available for cards: They are not only always locked up with a pin code themselves, but also smartphones and other devices can be locked up additionally with pins, Face ID, fingerprint or other ways. This, eventually makes digital wallets a specifically safe payment method. Furthermore, all credit card and banking details are only stored heavily encrypted within the digital wallet apps.
Digital wallets you need to know
ApplePay, Google Pay and Samsung Pay are probably three of the most popular ones, however there are quite a few other digital wallets out there. Let’s take a look of some of the top digital wallets.
Apple Pay is the digital wallet by Apple and is suitable for all customers with an Apple device. It allows consumers to store their bank or credit card via secure encryptions in their Apple account within the app. From there, ApplePay enables seamless and secure ways of payments for both online and in-store purchases. For in-store payments, transactions will be authenticated with Touch ID. Being available with MultiSafepay, this allows merchants to reach millions of potential consumers.
Alipay is the Asian response to digital wallets. China’s most popular payment methods has over 1 billion active users and handles more than 100 million daily transactions. Customers use Alipay for all different kinds of transactions, from paying in-store and online to receiving international money transfers. They can make transactions directly via their mobile devices, easily with one-click options and contact-free via QR code or scanning. With the average expense of Chinese consumers and businesses in Europe increasing steadily, Alipay is rapidly conquering the European market. Available for all MultiSafepay clients, this option is an innovative addition for European webshops.
The oldest and most widely used digital wallet is PayPals One Touch, an extension of the usual service offered by PayPal. Being available for Android and iOS PayPal it enables users to make payments or transfer funds in a quick, easy and safe way. Besides smartphones, PayPal’s mobile wallet app can also operate on desktops, laptops or tablets.
With 20 years of experience in ecommerce and over 30 national and international payment methods available, MultiSafepay can help you to adapt to the demands of your customers.
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