“Digital payments are growing at a compounded annual growth rate of 12.7 percent in the non-cash transaction category. From a mere 1.5 million merchants who are accepting digital payments to 10 million merchants, that this industry has added shows its potential and popularity.”, according to research by KPMG.
Thus, offering a digital wallet, or e-wallet, payment option on e-commerce platforms can significantly increase conversion rates and return on investment (ROI) for businesses. In this article, VNEXT Global will provide some knowledge about digital wallets in real life.
What Is A Digital Wallet?
Digital wallets, also referred to as e-wallets, enable users to save money, making it simpler to complete online transactions without having to enter card information. Because of the simplicity and security, digital wallets have revolutionized the development of digital payments in particular, and of the fintech industry in general. Instead of handing over all of the financial information of customers to the retailer, digital wallets offer a one-time token to e-commerce platforms, creating the higher security level.
Also, data has demonstrated that facilitating payments using digital wallets has assisted e-commerce companies experience lower cart abandonment and higher conversion rates. Many e-commerce platforms gain popularity and legitimacy by allowing users to pay via digital wallets.
The Underlying Technologies Of A Digital Wallet
Digital wallets, or e-wallets, is combination of three main components:
- System (the electronic infrastructure)
- Application (the software that works on the frontend)
- Devices (the individual portal of users)
Additionally, software and data management are included in digital wallets. The software consists of the electronic framework and the application that stores and secures the personal data of users during the transaction. The data management consists of a user-filled database of data, including shipping and billing addresses of users, as well as payment information (such as credit card numbers, expiration dates, and security codes).
Benefits Of Digital Wallets
- While making an online purchase, the digital wallets, or e-wallet, can automatically collect the user information in the online form, thus enhancing user experience.
- The software prompts users when it recognizes a form, a password/ or KYC will be required to auto-fill the form. This prevents unauthorized users from stealing personal information.
- E-wallets are used to authenticate the user credentials. For instance, a digital wallet could potentially verify the age of the buyer while purchasing alcohol. The buyers may also have their driving licenses, loyalty card(s), and other ID documents stored on the mobile devices.
Some Of The Most Popular Digital Wallets
Google Pay is a digital wallet as well as an online payment system developed by Google. It enables users to make in-app, online, and in-person contactless purchases through mobile devices, tablets and digital watches. Google Pay is the most popular digital wallet platform in the world with a presence in 28 countries.
Apple Pay is a digital wallet and mobile payment service by Apple Inc. that works on NFC (Near Field Communication) technology. It provides extra security with a two-factor authentication process through Face ID, Touch ID, Passcode or PIN. Payments can be made with the help of artificial intelligence-based voice assistants namely Siri. This service is only available for Apple products. Apple is aggressively expanding Apple Pay to many other countries in Europe and the APAC.
Alipay is an e-wallet launched by giant e-commerce enterprise Alibaba. It has been integrated with Taobao and Tmall, which are the two most popular e-commerce websites in China. Apart from tying up with more than 100 banks in that region, users of Alipay can top up their wallets from retail outlets like ParknShop, 7-Eleven, etc.
Paypal is the oldest and most popular digital payment gateway containing an easy-to-use digital wallet system with no set-up fee and a transparent transaction-based fee structure. Its services are available in almost all major countries of the world, thus making Paypal become a favorite among all major international e-commerce companies. Paypal accepts all major international debit and credit cards, such as Visa, MasterCard, American Express, JCB, and Diner’s.
Digital wallets, thanks to a lot of benefits, can leverage the experience in the customer journey, thus accelerating the growth of businesses, especially ones specializing in e-commerce. Let yourself be left behind, or upswing your business right now with digital payment, maybe with the assistance of a digital accelerator.
If you are looking for a trusted IT partner, VNEXT Global is the ideal choice. With 14+ years of experience, we surely can help you to optimize your business digitalization within a small budget and short time. Currently, we have 400+ IT consultants and developers in Mobile App, Web App, System, Blockchain Development and Testing Services. We have provided solutions to 600+ projects in several industries for clients worldwide. We are willing to become a companion on your way to success. Please tell us when is convenient for you to have an online meeting to discuss this further. Have a nice day!