Digital wallets became increasingly popular when Apple Pay was first released in 2014. Apple Pay is a mobile payment and digital wallet service by Apple Inc. that allows users to make payments in person, in iOS apps, and on the web. Since then there was a hype surrounding digital wallets, and mobile payments and people were predicting that it could replace your credit cards entirely, especially within your small business. However, this did not happen precisely what people were predicting back then.
Nevertheless, countries such as the U.S, Sweden, Singapore, France, Belgium, and the U.K are becoming cashless societies. On the other hand, countries such as Australia, Brazil, India, and many more are following the footsteps. According to Business Insider, they have forecast that in the U.S alone, mobile payments volume will increase to $503 billion by 2020.
The advantages of digital wallets
Offers more convenience for many consumers - Digital wallet allows them to add in any credit cards of their preference, and not to mention, and consumers are no longer required to carry a lot of cash with them either. The consumers need to tap on their device to the payment receptacle or other paying methods such as have their mobile device scanned to pay the items that they are purchasing.
Provide more security - Losing your physical credit card can be quite a hassle because you will need to contact the bank to cancel it and issue a new credit card. Another scenario such as losing your cash in your pocket, you will have zero option to retrieve your money. However, with a digital wallet, all the information is stored through a third-party provider. The digital wallet is locked with your password or biometrics depending on your devices. As a result, even if you lose your device, you will still have access to your digital wallet once you get a new one.
Available at most retailers and online stores- Consumers who use digital wallets can make payments in most retailers and online stores that accept cards as a payment option. Digital wallets are becoming widely accepted by these stores. However, there are still some retailers who are again using the traditional payment processing method in some are, but the number of retailers who accept digital wallets as a form of payment continues to increase each year.
Against unauthorized purchases- In most cases, when users are initiating a transaction, their digital wallet requires them to input PIN to authorize the payment. On the other hand, if their device uses biometrics, any payments will require their fingerprint to allow it. This will enhance the security, and against any unauthorized purchases.
Access to new rewards- There are many digital wallet providers in the market offer incentives to their consumers. These providers want to ensure and encourage their consumers to use them rather than traditional payment methods. Discount may apply to purchases such as petrol, food, and beverages, or even paying your bills. For instance, IIMMPACT SDN BHD is an all-in-one discounted mobile recharge, bill payment, transportation application. This application is design for users who are looking for convenience and cost saving when it comes to mobile top-up recharge, bill payments, and transportation tickets.
How can digital wallets benefit small businesses?
Since we have learned some basic features and advantages of the digital wallet for consumers, and now we will go through some of the benefits for small businesses that adopt digital wallet as a payment method.
Improves customer experience - Small businesses that accept digital wallet as a form of payment will be allowed them to have a much more simplified checkout process. For instance, the business owner will not need to fill out lengthy forms and remember the credit card number. They need to tap, scan, or auto-fill it. The checkout process will be complete directly from their phones. At the same time, retailers may have the option to reward their customers with discount codes for their next purchases.
Total control of your payment system - The business owner can now customize their payment platform. For instance, they can choose the payment gateway providers of their choice, such as Stripe, Paypal, and many more.
Access to real-time data - Most of the digital wallet in the market will allow the business owner to access real-time data such as customer shopping preferences and shopping history. Hence, they may send their customers with product suggestions and combine loyalty or reward programs. Most of the large e-commerce such as Lazada or Shopee practice these methods to boost their users to continue to spend on their platform. Additionally, they may manage their product costs and budget all in real-time too.
Keep your business ahead of the curve- Regardless of any industry of the business owner are in, the reality is that every business owner is facing the same issue, which is to compete with among themselves. By adopting digital wallets in their industry will undoubtedly help them to gain a competitive advantage. The reasons are digital wallets are simple to implement, speed up the checkout process, and save money on processing fees.
There is no doubt that digital wallets are the future of payments. As a result, a small business should embrace them sooner than later. Besides that, adopting digital wallets for their business is also depends on the preferences of their customers. For instance, if the majority of their customers are base on an older demographic, there is no rush to adopt a digital wallet. Furthermore, if a small business wishes to implement digital wallets, it is easy and inexpensive. They should explore the benefits of digital wallets that will provide to their small businesses.