What is a digital wallet?
Digital wallets are transaction applications that run on mobile devices. They store payment information and passwords and allow users to pay using their devices instead of traditional cards. Card information stores digitally, so that users may not even need to bring their cards with them.
As well as debit and credit cards, digital wallets can store:
- Gift cards
- Membership cards
- Event tickets
- Hotel reservations
- ID cards
Digital wallets use a mobile device’s wireless technology – including Bluetooth, WiFi, and magnetic signals, to transmit payment data to the point of sale. The technologies in use include:
- QR codes
- Near field communication (NFC)
- Magnetic secure transmission (MST)
How have digital wallets grown?
400 million people used a digital wallet in 2015. Today that number stands at around 2.6 billion, and is expected to surpass 4.4 billion by 2025. Predictions about transaction value estimate a 60% increase over the next four years. This explosive growth is predicated on the technology’s benefits to consumers and businesses.
What are the benefits of digital wallets for consumers?
Digital wallets offer consumers convenience. They eliminate the need for counting cash, carrying loose change, or selecting from an array of cards. This provides a simplified experience. Digital wallets also can deploy virtual cards. This means new bank customers can use their account from the moment of creation, rather than waiting days for the arrival of a physical card.
Digital wallets can store more than payment information. They can become an important hub for a customer. For example, an international traveller could book a flight, board a plane, check into their hotel, and pay for everything all from their digital wallet.
Some services, like Venmo and Google Pay, also offer peer-to-peer payment transfers. This makes it easier for groups of people to split bills or send gifts to friends and family. Other systems allow expense tracking to help users budget better.
What are the benefits of digital wallets for businesses?
Digital wallets are a low-cost method for attracting new customers. With low deployment risk and a high frequency of interaction, they are a powerful first point of entry for new users. They can be monetised further by offering extra services. This could come from insurance, loans, or membership programmes.
Digital wallets also improve the customer experience. They streamline the checkout process by eliminating forms and clickthroughs and reducing abandonment. This drives conversion.
Businesses can use wallets to gain real-time data and insights into the shopping habits of customers. History, preferences, and trends data can help create targeted marketing campaigns and manage inventory and budget accurately.
The Pismo digital wallet platform
Pismo offers a versatile digital wallet platform that brings the best experience to your customers. It allows users to transfer funds to their wallet accounts easily and use the balance for payments, mobile phone top-ups, and fund transfers.
Users also have the option to store payment cards in their wallets and use them for shopping. With more than 600 APIs, it’s simple to add functions to the wallet, making it a super-app or a complete mobile banking app.
Want to learn more about what a digital wallet could do for your company? Talk to us today.