As the world dives further into the digital age, more businesses are transitioning to E-commerce platforms and automating their processes online. While traditional payment methods are still relatively common, entrepreneurs have slowly been opening up the market for contactless transactions for their convenience and accessibility.
While cashless payment methods aren’t groundbreaking technology and have been around for over 10 years, mobile wallets, in particular, have soared in popularity since the global pandemic outbreak. For many consumers, being able to pay for purchases and bills using only a smartphone makes shopping a lot easier.
Perhaps you want to offer a touch-free way for your customers to pay to protect their health and safety. Or maybe you simply want to give your customers yet another way to pay for their purchase, for their convenience. Mobile wallets are the future of retail payments, and businesses that don’t evolve are going to fall behind.
What is a Mobile Wallet, Exactly?
A mobile wallet is exactly what it sounds like — it’s an electronic payment system that stores bank account information from debit, credit, gift, and reward cards. Instead of carrying a bulky wallet around, a digital wallet allows you to access all your payment details on a mobile device. E-wallets allow you to make purchases in-stores, online, and with some mobile wallet apps, you can also send and receive money.
Some of the standard digital wallet apps you might already be familiar with include Fitbit Pay, Venmo, Apple Pay, Google Pay, Garmin Pay, Samsung Pay, and PayPal.
How Does One Use a Mobile Wallet?
Mobile wallets are pretty intuitive and easy to use. Today, most smartphones already come with the most popular digital wallet apps installed. If you don’t have one yet, start by downloading the mobile app of your choice onto your iPhone, Android, iPad, or other compatible devices.
Launch the app and add the card information you want to store, which you may do so by using the phone’s camera or inputting it manually. Your bank will then have to verify and authenticate your mobile wallet application. Once verified, an image of your card issued will appear in your mobile wallet, and you’re good to go.
Suppose you want to use your e-wallet for physical store purchases. In that case, all you have to do is launch your mobile wallet app on your smart device, select a card, and hover your device over the card terminal for a couple of seconds until you see a confirmation that the payment went through.
For online store purchases, simply tap the logo of your virtual wallet app at checkout, and the app should open automatically. Similar to in-store purchases, you then select the card you want to use and proceed with “Pay.” Easy!
What are the Benefits of Allowing Mobile Wallet Payments?
Maybe you’ve been planning to go contactless for a while now. Maybe you’re not, and this is the first time you’ve heard of mobile wallets. Regardless, digital wallets offer an array of benefits for both the users and businesses who accept this form of payment.
1. Digital Wallets Offer More Security.
In general, most mobile wallet apps use encryption to protect the information stored in them. This means the actual card data and numbers aren’t shown to merchants while people shop.
Instead, E-wallets generate random payment codes or tokens to use per purchase. Often, these codes are only transmitted to retailers after bypassing a security feature on the smartphone, like biometrics or Face ID. In addition, if the shopper loses their phone, someone who finds it won’t be able to do anything with the mobile wallet because the full account number won’t be displayed anywhere.
Digital wallets better protect the business and the customer.
2. Mobile Wallets are More Accessible
In the 2019 FDIC Survey of Household Use of Banking and Financial Services, 7.1 million households in the US reported experiencing difficulties acquiring a bank account, with families having no one with a bank account. E-wallets and contactless payment offer another method for purchasing items/services, storing and transferring funds, and sometimes even allowing you to write checks, even without a bank account.
It gives individuals another way to shop, and thus, businesses another way to earn revenue.
3. Digital Wallets are Safer and Faster to Use
There’s no better time to transfer to a contactless payment option than now. With a mobile wallet, you reduce possible health risks because there is no need to touch a keypad or hold cash and change. In addition, most transactions can be completed in just a few seconds, reducing the number of places where you store card information.
Using a digital wallet also makes the shopping experience better by saving your customers from the hassle of typing in card numbers when purchasing something online.
How Do Business Owners Benefit from Mobile Wallets?
Let’s dive into this just a little bit more.
Digital wallets provide a range of advantages to merchants offering it as a payment method as well. In 2021, about 6.37 billion people were reported to be smartphone owners, a considerably huge jump from pre-pandemic data when only 5.64 billion had a smartphone.
As the number of smartphone owners increases yearly, it’s safe to say that cash purchases and other traditional payment modes might soon become a relic of the past. With a mobile wallet as a payment option, your business gets to reach more people and more potential customers.
With security measures in place that are not available with cash or physical card purchases, electronic payment transactions are less risky and reduce the chances of fraud and scams. You also don’t have to handle cash directly, so your business is less vulnerable to robbery.
Furthermore, your business transactions become easy and seamless. Cash and check payment methods are notorious for long bank transaction processes. While credit and debit card purchases are slightly quicker, they can still be halted by technicalities such as signatures and finicky card readers. Mobile wallet transactions are the safest and fastest payment modes that keep your line moving and reduce the chances of abandoned carts, leading to better sales.
Ready to accept mobile wallet payments for your own business? You need a solid POS system. Get a free quote from True POS today!