Understanding the Digital Wallet
For users wanting to securely store their payment information, they will need a secure encrypted mechanism. And this is what the digital wallet system offers. A digital wallet is a system that exactly does that. It saves crucial user information like passwords and usernames for multiple websites and payment methods. One of the major benefits of using digital wallets is its ability to integrate with mobile payment systems, allowing customers to pay instantly using their smartphones. It can also store digital coupons along with loyalty card information.
A current lot of successful digital wallets are Amazon Pay, Google Pay and Apple Pay with some using integrated mobile system components.
Examples of the most popular digital wallets include Google Pay, Apple Pay, and Amazon Pay. Some of these also include an integrated mobile payment system component. Many people are already using digital wallets as a preferred payment option to make eCommerce purchases. Certainly, due to its convenient use, affordability and ease of use it is becoming the buzz term forcing businesses to build payment app.
How eCommerce merchant benefits from using digital wallets?
Digital payment will involve two parties – the payer and the receiver. While it can surely help the payers offering a faster and better way to make payment even the merchants on the receiving end of the payment mechanism can leverage digital wallets. The effortless checkout mechanism is accompanied by a hassle-free information logging system where users won’t have to re-enter all the information every time they want to make a purchase using their credit card.
There is also a study indicating a higher rate of checkout conversions when dealing with buyers using digital wallets. Tapping on the PayPal conversions versus the one without it, that study revealed PayPal conversions at a rate of 88.7%. This is 82% higher than the checkouts without PayPal. Certainly, the mechanism is helping e-commerce sellers to boost their sales at the last step. Such online buying behavior demands sophisticated digital wallet solutions.
How Online Buyers can benefit using Digital Wallets?
No one likes to carry all their shopping essentials like a credit card, debit card, and other loyalty and gift cards every time. Physical safety of the card is also an important thing to consider when one is commuting or out there in a large crowd where fear of losing a physical wallet is quite high. Here is where digital wallets come to play.
The essential card details are entered into the digital wallet stored inside a mobile device. And even in case one forgets to carry the card, using a mobile for making the payment is simple. Buyers can shop by simply holding the phone closer to a payment device. A single tap is enough to make a purchase online wherein entering all the necessary cards and payment information is not required.
Addressing the Safety Concerns
It is natural to think about giving away important card information and store in a mobile device. Many phishing schemes are waiting to steal the passwords and awaiting a single lapse in security. Staying aware and cautious about digital payment is the best form of defense approach. Though the concerns are real, here is why using digital wallets is practically safer than using physical cards.
Digital wallet payment ensures the safety of card number almost all the time, even while making the transactions. The important card details are hidden from the seller during transactions. It uses the tokenization process for generating a random set of numbers specifically used for making a particular payment.
Heavily-loaded encryption methods used during the digital wallet app development may give a tough time to anyone trying to access your secured information. Pick-pocketing is simply not possible. And since this is nearly impossible for anyone to see or use your information.
Unlike with physical cards, this information can’t be pick-pocketed either. Using peer to peer payment app with the digital wallet ensures that there is a no security breach with a third party in the middle responsible for undertaking necessary security measures for every transaction.
Free from Physical Loss
Using digital wallets for payments will have users keeping their physical cards at home. And even in the case, one loses the phone, it is possible to lock down the digital wallet remotely without worrying about its security.
One of the research suggests peer-to-peer payment apps crossing 120 million marks by next year. And now, with iOS, it is possible to make payment to anyone in your contacts using iMessage. Such wallets come handy to make instant payment at stores or even while making a purchase online. Also, linking it up to the bank account makes digital to physical transactions almost seamless.
Simplified Mobile Shopping
Mobile wallets are becoming a popular option amongst the frequent eCommerce users engaged in buying online using merely their mobile devices. The US retail sales have witnessed a huge revolution already within the past few years with almost 95% of Americans opting for online shopping at least once a year.
A gradual rise in eCommerce shopping is going to affect the m-commerce (mobile shopping). The significant growth is the result of trust that online shopping has built over years by matching customer expectations. The answer to why digital wallets have become a buzzword for payment option lies in its ability of integrations. Users can now make quick payments easily without the recurring need to enter card details on an app or website. Payments through a mobile device are possible by choosing the payment app at the checkout giving buyers an exhaustive shopping experience including payments.
Digital wallets, mobile or otherwise are gaining popularity with marketers promoting such use by putting up lucrative offers. Onboarding users and retaining them is easy with cashback and discounts offered to new users. Each application can have its wallet freeing loyal users from the hassles of reaching out to physical every time they pay on that app. Though being efficient and reliable, digital wallets have to come a long way to practically replace the need for physical cards. Only big brands and major retailers are accepting the digital wallets so even the users will have to wait for it to penetrate the wider market.