Digital wallets have revolutionized the way we make payments, and they have made the transactional process in today’s world both easier and more secure. Whether the purchase is being made online or in-store, digital wallets are an increasingly convenient way to pay.
The impact of digital wallets over the years
Digital wallets, also known as e-wallets or mobile wallets, have been around since the late 90s. The first digital payment opportunities were provided by Coca-Cola in Helsinki in 1997 when they released a few vending machines that allowed customers to make purchases through text messages! This early form of digital payment was a major stepping stone to the modern-day e-wallet.
In October 1999, another giant leap was taken when PayPal opened to the public, allowing electronic money transfers to be sent between any two people with email addresses. PayPal is widely recognized as the first payment technology of its kind. Over the next few years, advancements in tech led to the ability to purchase things such as food, movie tickets, and hotels from your phone.
Although digital transactions were available for nearly 15 years beforehand, it wasn’t until after the rise of smartphones that the e-wallet really took off! The introduction of Google Wallet in 2011, followed by Apple Pay in 2014, brought the convenience of mobile payments to the masses; since then, digital wallets have become increasingly popular. Now, digital wallets allow users to store various payment methods together. Credit and debit cards, bank accounts, and even cryptocurrencies can all live in a single, secure app on a smartphone! You can use these digital wallets to make payments in-person and online, as well as to send and receive money.
E-wallets have changed payment-making in several ways. They have made it faster and more convenient, especially for mobile transactions where pulling out a physical card can be cumbersome. They have also increased security by encrypting payment data and using biometric authentication, such as fingerprint or facial recognition, to verify transactions.
Digital wallets have also enabled new forms of payment such as contactless payments using near-field communication (NFC) technology, which allows users to make payments simply by tapping their smartphone or smartwatch on a payment terminal.
How do digital wallets fit into e-commerce?
Online stores can use digital wallet payments as a convenient and secure way for customers to pay for their purchases. When a customer chooses to use a digital wallet to pay, they can select their preferred payment option during the checkout process, then be redirected to either their mobile wallet app or website to complete the transaction. Within this app, the user has previously set up an account and added payment information such as their credit or debit card details. These details are typically secured by a PIN or by biometric authentication like fingerprint or facial recognition.
As a merchant, accepting digital wallet payments is easy! Most online stores use a payment gateway, which is a third-party service that securely processes payments on behalf of the merchant. The payment gateway typically supports various payment methods, including digital wallets, and handles transaction processing and settlement.
Implementing e-wallets in your online business can have several advantages. They can streamline the payment process, making it more convenient for customers to make purchases, which can lead to increased sales. Since digital wallets eliminate the need to enter payment information, checkout becomes faster, making customers more likely to complete their purchases. This leads to a drop in shopping cart abandonment rates!
Another benefit of accepting digital wallet payments is that they are often more secure than traditional payment methods. The built-in encryption and authentication methods protect payment information, preventing fraudulent purchases and theft.
Haven’t started accepting mobile wallet payments yet?
E-wallets have had a significant impact on ecommerce, as they provide a fast and secure payment method for online transactions. They have become increasingly popular in recent years, and most online retailers now offer e-wallets as a payment option. E-wallets can help increase conversion rates, improve customer satisfaction, and reduce cart abandonment rates, which can ultimately lead to increased revenue for your online business.