The rise of Digital Wallets for in person payments
The use of mobile wallets is on the rise, so if you’re taking payments at a point of sale it’s important you understand them. It’s expected that globally, 1.6 billion consumers will pay by digital wallets at point-of-sale in 2023, that’s 30% of POS transactions.
What is a Digital Wallet?
A digital wallet is a payment tool that lets consumers make payments in stores, online or via apps using their smartphone. The digital wallet lets you securely store virtual versions of debit and credit cards as well as things like tickets, loyalty cards and vouchers. The wallet is usually an app; Apple, Google and Samsung all have their own built into their latest phone models.
How does it work?
A Digital Wallet links the payment details from the bank account connected to your cards to the business that you are making a transaction with. It is similar to making a contactless payment, except the data is sent from the wallet rather than the physical card.
Are they secure?
Digital wallets on Smartphones are stored within password and biometric protected devices, varying from Touch ID to Face ID and passwords. Card information is always encrypted and never stored within the app or shared with the business at point of payment. Each card is tokenized which allows the payment gateway to charge the account the card is connected to without sharing card or bank data with the merchant. However, it’s important that consumers stay aware of risk and don’t share their password, monitor their accounts and disable their device if it is lost or stolen.
Why do people like using Digital Wallets?
There are many benefits to using a Digital Wallet:
- They are quicker, simpler are more convenient to use as consumers don’t need to carry multiple cards around with them. Consumers can always have their cards on hand without having to root around for the card they want to use.
- It limits the amount of financial and personal information consumers need to carry around, which means there is less risk of cards being lost or stolen. It also means consumers can’t lose their entire wallet.
- The card data is never stored in the app. Unlike if your card is stolen, they won’t be able to use your cards without your password.
- Consumers don’t need to remember multiple PIN numbers and passwords. All cards can be accessed with a phone password, Face ID or Touch ID.
- They let you store more than payment cards. Consumers can also save things like loyalty cards, train tickets, concert tickets and gift cards in an easily accessible and organised place.
- For merchants there is less chance of fraud because of the security of Digital Wallets. It also offers a quick and easy checkout which reduces queues leading to more sales and an improved customer experience.
