As mobile and online businesses continue to evolve and grow with the innovation of new technologies, there is an increasing need for traditional retailers to find new ways to connect to the customers. In the present highly competitive industry, it is essential for retailers to streamline the process of online shopping experience to engage the customers.
Digital wallets technology provides an excellent opportunity for retailers to integrate a simple payment option with just one click in the wallet. Contactless payments are a new trend and are increasingly being used by retailers and customers; for both online and offline shopping, especially in the current pandemic situation.
What are Digital Wallets?
The digital wallet system helps secure and store users passwords and payment information for websites and multiple payment methods and usually works through smartphone apps. Also known as an E-wallet or Mobile wallet, a digital wallet can secure data through passwords and encryption.
E-wallets can be used to transfer money and process payments from mobile with just a click or using a top-up and bill payment solution. It can also store digital vouchers or loyalty details of the users.
Types of Digital Wallets
- Closed wallet- Usually developed by the company for a smooth transaction process between the customers and the issuer of the wallet. Closed wallets are developed for transactions only between the issuer and user within the company’s app.
- Open Wallet- Banks or institutes that are partnered with banks usually issue open wallets. Open wallets allow users to make transactions with semi-closed wallet other than with drawl of money from ATM’s and banks.
- Semi-close Wallet- With a semi-closed wallet, users can make transactions with listed merchants and locations. Although the coverage area is restricted, both offline and online payments can be made with these wallets. However, to accept mobile payments, merchants need to have an agreement with the issuers.
Some of the most popular digital wallets available for retailers include:
- Google Pay
- Amazon Pay
- Apple Pay
- Paypal One Touch
- Android Pay
- Visa Checkout
Benefits of Digital Wallets for Retailers
The features of digital wallets bring values for retailers, and some of the advantages of using them are as follows:
- Reduce Transaction Fees
Retailers can minimize their transaction costs along with customers transaction costs by using digital wallets. With the closed wallet model eliminating bank transaction costs, it will also help the transaction fee of the customer.
Merchants can reduce bank transaction costs by issuing self-payment cards that can be used on e-wallets. The cashless payments eliminate additional retailer costs.
- Quick and Convenient Transactions
Using a mobile wallet can speed up both the in-store and online checkout process while improving the customer experience. Customers can skip the long queue for EMV chip card payments, as the digital wallet can process the transaction in few seconds with just a tap or click.
With a quick transaction process, customers can quickly check out with just one click. This results in an increase of loyal customers for retailers.
- Increased Security with low Risk
When setting up a digital wallet, Security should be the top priority as an issue within the Security can cause customer’s personal information stolen. Therefore, e-wallets come with various security protocols to minimize this Risk of fraud management through biometric authentication and tokenization.
This provides an additional layer of security to the mobile wallet as it requires fingerprint of facial recognition to be able to access the wallet, thereby making it the most secure method of transactions.
- Enhances Customer Experience
Retailers can customize the wallet to understand how their brand is operating, and e-wallets provide them with extensive data on customer behaviour and preferences. The insights collected from this data enable retailers to develop special offers and provide predictive recommendations of purchases to customers.
Retailers can increase their customer base with mobile wallets as they help gain more loyal customers with an enhanced customer experience.
- Increase in Sales
Customers can download and use discount vouchers, and coupons sent by merchants and retailers can stay in contact with customers by regularly updating these offers where customers can use coupons and pay from them, leading to more sales.
Many retailers are currently following this method to increase their sales and drive profit.
Therefore, digital wallets are of great benefit, especially for retailers to streamline customers’ checkout process, enabling them to make the payment more effortlessly and conveniently.
The opportunities for retailers and businesses to empower customers are endless, with the latest technology available to incorporate digital wallets into their business operations. Many IT companies are coming up with their own wallets to provide better customer experience and one such example is O-wallet developed by ONPASSIVE.
Therefore, in the current competitive environment, all businesses need to incorporate and use digital wallets for a safe and secure payment mode and find the right digital tech partner that best suits their company needs and objectives and can easily be adapted with the future scope of expansion.