The Innovation of Now – Digital Wallets
Digital wallets are the hottest new craze in payment processing, and companies that don’t jump on board with this trend right away risk losing business to their competitors who do adopt it. Digital wallets are particularly popular with millennials, who make up a large part of the consumer population. Older generations are gradually adopting this new technology as well, though not in quite as large numbers as millennials.
What Are Digital Wallets?
At the most basic level, digital wallets allow customers to make purchases online, either on their computers or mobile phones, without the need to put in their credit card information for each new purchase. The customer enters their bank account and credit cards into the digital wallet so that everything is stored all in one place. Mobile apps, like Apple Pay and Android Pay make it easy for consumers to make purchases using their mobile phones, both online and in stores. Although this technology is still relatively new, early adopters report that it provides added value for the customers in choosing how they wish to pay.
Benefits for Consumers
Digital wallets provide an added layer of security for the consumer, as they no longer run the risk of their wallet being stolen and the thief getting a hold of their credit and debit cards. Furthermore, digital wallets are equipped with high levels of online security to minimize the risk of hacking and identity theft. In many cases, digital wallets require a biometric password in order to make a payment, like the user’s fingerprint. This is significantly more secure than the traditional password model of data protection, as a thief cannot fake the user’s unique fingerprint to access their data, whereas passwords can be stolen.
In addition to making purchases online, consumers can also transfer money between their bank accounts, pay bills, send money to friends, split restaurant checks, and even make purchases in retail stores. Digital wallets don’t come close to being matched by other payment methods at this point, with their high level of convenience and flexibility for consumers.
Benefits for Businesses
In today’s fast-paced world, consumers are increasingly demanding these alternative methods of payment, not just online, but in brick and mortar retailers as well. The speed and convenience that this method provides cannot be understated. Going forward, businesses that have not embraced this technology may begin to notice their customer base dwindling as they shift to other stores that do allow them to pay with digital wallets. Particularly in the case of small businesses, where every customer counts, even a small loss of patrons can sometimes spell financial trouble.
As the internet of things (IoT) continues to grow in scope and capabilities, businesses who do not make an effort to keep up will be left behind. In evaluating the payment processing services that you use for your business, it is important to be aware of recent developments in the industry so that you can make sure that your payment service provider is at the forefront of the newest innovations to help your business stay ahead.
Although digital wallets are still a relatively new trend in the payment processing industry, it is unlikely that the progress of this technology will slow down any time soon. Rather, it is expected to grow even stronger, along with the increasing growth of the IoT, into the foreseeable future. Your business should make a concerted effort to educate itself about this trend by reading trade journals and following #smartpayment on social media. Fronting the initial cost to upgrade your capabilities to be able to accept this new form of payment will be an investment that is well worth it in the near future.