In the online shopping and E-commerce industry today, many service and product payment methods are evolving quickly. Through constant innovation, payments become more efficient and convenient for buyers using online platforms. Online business owners gain, too, with the improved navigation systems for processing that help bridge the gap between differences in currencies, taxation laws, and the transfer of funds. The most popular payment method is digital wallets, providing buyers and sellers with a streamlined, easy payment experience.
Read on to see what digital wallets are, the types of digital wallets, and how your business can benefit from them.
What is a digital wallet?
Digital wallets (or e-wallets) are exactly what they sound like: a digital version of your financial accounts. This digital payment system is easily accessible via smartphones, tablets, or any smart device that ultimately eliminates the need to carry an actual wallet.
Digital wallets keep track of the buyer’s payment information, such as credit card or debit card data, banking information, and payment platform connectivity. They provide a convenient, safe, and fast alternative to physical wallets and cards. Different types of digital wallets serve different circumstances, different types of businesses, and different types of consumers. Now that ecommerce is a global sector, companies and consumers alike utilize e-wallets in the marketplace.
Three of the most popular digital wallets are Apple Pay, Google Pay, and Samsung Pay. PayPal and Venmo are also widely used as they not only allow users to easily make payments but also make personal money transfers. Many brands also offer their own digital wallets, particularly food and beverage chains with loyalty programs. For example, Starbucks incentivizes customers to use their app by rewarding them with “stars.” Customers can redeem these stars for free drinks and other rewards. However, customers have to pay within the app via a digital wallet to earn and use these rewards.
What are the benefits of digital wallets?
Digital wallets make online transactions and money transfers easier. Here are the main benefits of digital wallets:
1. Simple process
With the help of digital wallets, one can avoid the hassle of searching for their physical cards and make payments quickly and easily through their mobile device. They can also make purchases easier when shopping on online stores.
2. Unlimited use
Customers only need to link their bank account with their digital wallet app once in order to use it. Their account will remain linked and won’t require users to re-enter their information for future transactions.
3. Transaction speed
Speed is another advantage of digital wallets — transactions are made seamlessly and completed in a blink of an eye. Customers no longer have to wait for a refund, and they can also fund their e-wallet and withdraw money anytime.
4. Extended functionality
E-wallets use data encryption to ensure all information is secure for both buyers and sellers. Using e-wallets, customers can send and receive money in different currencies. Digital wallets also allow users to see their transaction history so they can easily keep track of their spending.
Types of digital wallets
There are several types of digital wallets and each serves different purposes for businesses and consumers. Here are the main types of digital wallets offered by issuers to perform particular tasks:
A closed e-wallet helps customers make payments when using an application or a website. It is linked to a specific brand or business and cannot be used with external apps or websites. Closed wallet users can only use the funds stored to make transactions with the issuer of the wallet. The funds, including money from cancellations, returns, or refunds, are stored in the wallet. Walmart Pay is an example of a closed wallet.
A semi-closed wallet allows users to make transactions at specific merchants and locations. Although the coverage area of such transactions is limited, both online and offline purchases can be made through this type of wallet. However, merchants need to make an agreement with the issuer to accept payments from the digital wallet.
This type of digital wallet is most used as it allows users to make payments online and offline at any time. With this type of e-wallet, users can easily make monetary transactions, such as transferring funds and withdrawing funds from banks and ATMs. The service provider allows them to make any transactions from anywhere in the world, provided that both the sender and the receiver have accounts on the same app.
Digital wallets offer customers a convenient, efficient, and secure method to make virtual payments and store tickets, gift cards, and more. With the rapid rise of customer demand, businesses should consider offering alternative payment methods to ensure customer satisfaction. If you want to capitalize on this growing market, AccountDock is here to help.
AccountDock is a leading billing history app for Stripe-powered businesses. We proudly provide customers with the ability to access, check and manage their receipts anytime and anywhere. Business owners can ensure customers have access to a clear, transparent payment history, which is a core contributor to customer loyalty.
Hundreds of business owners have trusted AccountDock as an ideal option for online and offline purchases. If you are an online business owner or an eCommerce entrepreneur who wants to achieve the highest level of customer satisfaction, try AccountDock for free today to see how we can improve your business proficiency!