Digital wallets have revolutionized the payment process for both consumers and retailers, making transactions faster and more secure. A virtual version of a physical wallet, digital wallets store information like bank account details, credit and debit cards, and even boarding passes. They enable users to send and receive money from any traditional banking source, and with just a few taps, customers can take care of countless everyday tasks.
According to reports, around 60% to 65% of Americans used a digital wallet in 2022, and predictions suggest that more than 60% of the world population will be using digital wallets by 2026. This suggests that digital wallets are becoming the new normal.
Here we will run through seven interesting facts and features about digital wallets, finding out what makes them so popular.
The Many Functions of Digital Wallets
Digital wallets enable users to securely store digital versions of payment methods, like credit cards, debit cards, gift cards, cryptocurrency, as well as boarding passes, event tickets and coupons, to use on the go with their smart device. A customer can then use their digital wallet to make purchases at stores – generally through contactless payment – online or through digital wallet apps. They can also be used to check payment history or account balance, and to pay for everyday things like household bills and rent.
Enhanced Security
Seeing as security is understandably a big concern when it comes to peoples’ finances, digital wallets have been created with plenty of enhanced security features to keep all the information safe. Payment verification features like fingerprints, face recognition and PINs ensure users have an added layer of protection when their digital wallets are being used.
On top of this, when customers check out with a digital wallet, a unique 16-digit number, or token, is assigned to their card. This token is secure as it means the customer’s physical card number isn’t seen by the merchant. These tokens can often only be used with a unique, encrypted, one-time code that gets applied to each individual transaction, making them more secure than using physical wallets.
Beyond Smartphones
It isn’t just smartphones that can be used to make payments from, you can also use smartwatches, rings, computers, or tablets for transactions. Accessing the information you need from these devices can make payments quicker and easier, as well as helping you declutter and avoid carrying a bunch of physical cards around with you at all times. Customers either tap and go for in-store purchases or use the digital wallets for online checkouts using the 16-digit token mentioned above.
Hot Competition
With the number of digital wallets rising, experts have warned vendors that they must remain innovative in order to stay competitive within the markets. Similar to how food delivery companies try to stay ahead of the game by having the app with the best features, or how online casinos remain competitive by trying to outdo each other with their latest no deposit bonus 2023 offers, digital wallets need to continue to work on how to drive adoption. Integrating loyalty features, like cash back and promo coupons, and utilizing personalized marketing capabilities as ways of incentivizing merchant acceptance have been just some of the ideas suggested within the industry.
Driving More Sales
Seamless checkout processes can only mean good things for retailers, both in-store and online. These help to improve the shopping experience for customers, making the buying hassle-free and reducing card abandonment issues for e-commerce sites. As a result, this should help drive the revenue for the retailers as shoppers can quickly complete their payments with ease.
Utility Bill Alerts
With the hustle and bustle of everyday life, most people have at some point accidentally missed their due date for paying bills. This is when another feature of digital wallets comes in handy. Not only can you pay for your bills via your digital wallet, but some will also automatically send you a notification or reminder whenever your next payment date is near. You can also set up auto payments in the apps to make paying bills even more stress-free.
Bill Sharing Options
For those who eat out with friends or family, digital wallets allow a seamless way to split the bill. As long as your contacts are available on the same digital payment app, bills can be split with just one tap of the phone. You can even track the payment status made by contacts.
