The way we pay for our purchases is rapidly evolving in a digitized world where the need for physical cash is practically absent. Unlike cards, a digital wallet or the eWallet is similar to a physical wallet minus the cash. The digital payment method was adopted by 1.3 billion consumers by the time 2021 ended, with the smartphone emerging as the primary online shopping and payment device the world over. And businesses have played a ball integrating the payment method in their checkout modules to grow sales and ensure a successful conversion. So, let us first learn what it is.
Understanding Digital Wallets
The technology adopted for digital wallets is considered a notch higher than plastic cards, where the entire concept is virtual functioning on a smartphone. The deep smartphone penetration has aided its ascendancy in our daily life, and the progression is natural. Furthermore, the ongoing Pandemic has further boosted the digital payment ecosystem where cash is no longer the preferred mode, and contactless payment is the new norm. So, let us now learn how to use the e-wallet.
Using Digital Wallets
Since an eWallet is a mobile app, you must install it before using it. Then, the eWallet is recharged using the stored information, including cards, bank accounts, passes, tickets, outlet bonus cards, to name a few. In other words, the eWallet is an ideal replacement for your physical wallet in every way.
Once the issuing bank authenticates your stored cards, you are free to use them for payments at eCommerce checkout points, online stores, and peer-to-peer money transfers. However, payment gateways in India must support the payment method in the merchant’s integrated system.
Digital Wallet Types
The digital payment ecosystem has spawned many eWallets, and the technology is still evolving, adding advanced functionalities with each passing day. Thus, you have a choice of digital wallets to rely on, facilitating payments wherever available.
A Payment Service Provider (PSP) is intrinsic to the ecosystem providing a merchant account to receive digital payments. Payment gateways in India covering all the payment methods are the ultimate customer experience offering multiple options. So, let us check them out and try Zaakpay payment solutions for ease and comfort.
- Smartphone Brand Service:
Buying a smartphone of your choice comes with many frills. Different types of wallets are configured for iPhone, Android, etc. The money is stored in the app and can be used for money transfers. In addition, the device or even the smartwatch is used at the payment terminal.
- Mobile Banking:
Smartphone has even penetrated the banking industry, with every bank launching an app providing various functionalities under banking services. The app doubles as a mobile digital wallet facilitating payments and money transfers in a few clicks.
You are spoilt for choice in digital wallets in the stand-alone category developed for payments and funding purchases, besides promoting money transfers and receipts. In addition, digital wallets multi-task bill payments and other related services. So, for example, you can book your gas cylinder from various Indian oil companies and, at the same time, navigate to eCommerce sites or even pay insurance premiums.
How does a digital wallet work?
Your smartphone digital wallet empowers you financially with multiple facilities. First, it pays digitally at checkout payment gateways in India, supporting the payment method. Zaakpay products specifically support every payment method.
Second, look for the contactless payment symbol at the checkout. Pay with your smartphone held close to the payment terminal to activate the transaction journey using the Near Field Communication (NFC) technology. However, you authorize the final merchant accountcredit with a single tap of the button or password input.
Third, every modern smartphone is a package covering infotainment and finance, other than the standard communication functions. Scan the bar or the QR code and initiate the payment journey, and complete it in a matter of seconds.
Digital Wallet Pros and Cons for Merchants
The digital wallet is powered by the smartphone, transforming how we live. Driven by ever-advancing technology, the device is indispensable in modern times, supporting our lifestyle. One of the critical features is the digital wallet, with both upsides and downsides like any other.
- Reduces consumer friction:
The bane of online shopping is abandoned carts, primarily for payment failure at checkout. eWallets help overcome the menace through a fast and simple payment solution. Thus, the conversion rates are high, translating to additional revenue generation. Moreover, today’s shoppers look for a seamless payment experience that eWallets provide, using the stored information to get the transaction through.
- Supports contactless payments:
Apart from the convenience of online payments, most eWallets are used for contactless payments. All you do is hold your smartphone close to the payment terminal to communicate using NFC technology. The process is quick, safe, and most importantly, the need of the hour during the Pandemic, eliminating the hazard of handling cash. The facility aligns with 60% of the consumers preferring the digital contactless payment method as protection against COVID-19.
- Improved security:
The shopper’s device hosting the e-wallet is already secure with limited access. In addition, the stored card information is secured using an additional layer called tokenization. Thus, the multiple security protocols embedded in the device and the digital wallet suit merchants and customers alike.
Cons for Merchants:
- Limited choice:
System integration at the merchant falls short of the requirements with dozens of e-wallets in the market. That is a dampener for customers who may desert the purchase at checkout for lacking their preferred digital wallet.
- Manage multiple payment integrations:
Multiple integrations to expand the ambit for digital wallets are time-consuming, costly, and complicated. Thus, merchants look for an all-in-one solution to accommodate e-wallets.
The Bottom Line
The digital wallet upsides weigh much more than the downsides to dent its growing popularity. Digital wallets signify the latest payment technology that is quick, safe, and uncomplicated. In addition, the contactless feature was a boon during the Pandemic, helping consumers adhere to the laid down social distancing norms. Although a few accessibility issues linger, digital wallets are here to stay and grow in use for the most part.