Digital wallets have become a default transaction method for many customers. The mobile-friendliness, convenience, and security of using digital wallets enable smooth purchases with minimal fuss, eliminating the challenges of manual transactions. In addition, digital wallets store credit/debit cardholder’s credentials within their mobile device, simplifying the transactional process.
Apple Pay and Google Pay (formerly known as Google Wallet) are two of the most widely used digital wallets. As a merchant, offering digital wallet transactions can make your business more accessible to a broader pool of customers by enabling user-friendly payments.
What Are Digital Wallets and How Do They Work?
Digital wallets, sometimes called e-wallets, are contactless payment options that customers can conveniently use to check out from point-of-sale terminals or during an online transaction. Users can quickly link credit and debit cards to their digital wallets on their mobile devices by manually keying in card details or scanning their physical card with the device’s built-in camera, capturing its details.
A user’s preferred digital wallet usually depends on the type of device they own and its respective operating system. For instance, iPhone users will go with Apple Pay, while Samsung Galaxy Note users will probably use Samsung Pay. In addition, digital wallets usually come pre-installed on a device, so users can readily access them upon purchase while skipping any onboarding.
With a digital wallet, customers can make fuss-free purchases via their mobile devices by unlocking them, opening the e-wallet app, and holding them close to a contactless payment terminal. Alternatively, they can make online purchases by keying in their credit or debit card details on a site, unlocking their mobile devices, and authorizing their digital wallet.
A beep or vibration usually indicates a successful transaction when using digital wallets. In addition, with digital wallet payments, customers can avoid touching a PIN terminal in brick-and-mortar settings when making a transaction for added convenience and contact-free hygiene.
Digital Wallet Safety Matters
Modern tech companies have continued to prioritize and improve the security standards of mobile wallets in recent years. As a result, while customers make payments directly using digital wallets on their mobile devices, they do not store sensitive information in plaintext that third parties can readily exploit.
Digital wallets usually offer tokenization and encryption that jumbles users’ financial information and password, making it extremely difficult for malicious parties to intercept the data delivered to a payment terminal.
Ultimately, the registered device is a verified bridge between customer accounts, the e-wallet application, and merchant accounts. Also, mobile wallets often come with built-in security measures such as OTPs (one-time pins) and multi-factor authentication that provide these accounts with added layers of safety.
How Do You Use a Digital Wallet?
Aside from seamless payment transactions, digital wallets also serve as secure one-stop storage for helpful documentation that can improve your customer’s overall experience. For instance, e-wallets may contain customer loyalty passes, where users can accumulate points and cash in on attractive rewards as they shop with your business.
The accessibility and security of digital wallets make it more convenient for customers to benefit from loyalty programs compared to conventional coupons and membership cards. Additionally, digital wallets will automatically sync with a customer’s device to provide them with the latest software versions and patch updates, maintaining accurate information.
Popular Digital Wallets
Over 150 million Americans have swapped cash and credit for digital wallets at least once. Most of these customers have turned to one of the top three digital wallets for faster, safer, and more reliable transactions.
Apple Pay
Apple Pay is a digital wallet that supports devices that run with iOS, iPadOS, and WatchOS apps. The wallet enables users to make quick and secure payment checkouts via biometric recognition, including face ID and fingerprint scans. Apple Pay has become one of the most popular digital wallets in the US, acquiring 43.9% of the nation’s mobile market shares.
Google Pay
Google Pay is one of the most popular digital wallets used worldwide, serving a large base of users with Android devices. In addition, many websites have utilized Google Pay as a preferred mode of payment, providing its service to over 150 million active users worldwide.
Samsung Pay
Samsung Pay has risen as the third-largest digital wallet in the world, serving over 16.3 million active users. Samsung also offers users added security protection, such as the Samsung Knox feature that constantly monitors phones for malware and potential cyber threats.
National Merchants Association — Guiding Your Business Through Digital Wallet Readiness
A Gallup poll shows that 62% of Americans expect the USA to become a cashless society within their lifetimes. As such, the lack of a digital wallet payment option might cost your business valuable customers and significant revenue in the long run.
The team of payments experts at National Merchants Association provides merchants with a focus on small businesses facing limited resources with the most suitable payment processor arrangements and solutions that avoid unreasonable fees.
Our experts can recommend the most effective methods and approaches for transitioning your business toward digital wallet readiness in a cost-effective and fuss-free process. At National Merchants Association, We Work For You™. We can help you take the necessary steps to adapt your business to the incoming era of mobile money, where digital wallets may gradually become the primary mode of payment.
About National Merchants Association
National Merchants Association is a merchant advocacy group dedicated to reducing the unnecessary fees associated with accepting credit card payments. Since 2004, they have delivered tailored payment processing solutions and best-in-class merchant service and support for all levels of risk.
Whether high-risk or low-risk, brick-and-mortar or e-commerce, National Merchants Association will create the best processing experience for your business. For more information, visit www.nationalmerchants.com or call (866) 509-7199.