In 2020, there were 8.3 million mobile payment users in the UK (Statista report), and this number is predicted to continue to grow steeply. Whilst this may not be news to many, digital wallets are an increasingly popular alternative to traditional debit or credit cards. In this article, we discuss what are e-wallets, their advantages and some of the types of e-wallets available.
An E-wallet, or digital wallet, is a software-based system that stores bank details and enables users to make payments through their mobile phones. Rather than carrying a physical wallet with all your debit and credit cards in it, you can add all of your current bank accounts’ details to your digital wallet and use them whenever you please, as long as you have your phone with you. You can also make payments with your phone using a digital wallet: whenever you reach the checkout page, you should be able to see which types of digital wallets that company supports, and make a payment through one single click.
Mobile payments made through a digital wallet are contactless and use Near-Field Communication technology to connect to the card reader. Digital wallets can also be used to store passwords and vouchers from other websites, such as coffee subscriptions or other memberships. In this case, users would usually have a QR code saved in their digital wallet, that they could then use to connect to the shop’s card reader. For debit and credit cards, no QR code is needed, so you can simply select the card you want to use virtually and hold your phone near the card reader.
There are also other electronic devices in which digital wallets can be used, such as smartwatches and tablets. In the UK, customers can use their digital wallets for contactless payments of up to £45 per purchase. For any amount over £45, customers will simply be required to type in their password.
Convenience is the most obvious advantage of digital wallets, and something that consumers are very much on the lookout for. Digital wallets enable mobile phone users to use this device to make payments anywhere, avoiding the need to bring their physical wallet with them or to insert their card’s password. This also saves time and stress, as some customers may forget their wallet at home, but it is unlikely they will forget their mobile phones.
They are also a safe way to pay, as all information stored in digital wallets is encrypted. This means that your actual numbers aren’t transmitted along the way when making a payment, as they are replaced by a series of random numbers that represent your card but are impossible to link back to your account. Encryption is a common tool used to improve payment security online. Your bank details are also safe on your phone and are not displayed anywhere so, if you were to lose your phone, no one would be able to access your details. Equally, all mobile transactions are protected by the same type of security and rules as the physical cards.
For businesses, supporting mobile payments may help to reduce checkout abandonment and to increase sales. This is because, essentially, merchants are giving their customers more payment options to choose from, so customers are more likely to find the payment method they prefer.
The options of e-wallets available to you will depend on your phone’s brand. Apple Pay is available for all iOS users, for instance, whereas Samsung users can access Samsung Pay and other Android users can access Google Pay. Apple Pay lets you pay in over 60 countries, and Samsung Pay lets you pay in at least 24 countries.
Though digital wallets vary in smaller details such as the countries they support, they all have the same main functionality of enabling users to pay with their phones. In the US, Google Pay users can also send money between friends through this digital wallet. Other popular digital wallets across the globe include Alipay and WeChat (only available for users in China), Venmo (US-based), Cash App, PayPal and Zelle.
Imburse is a cloud-based middleware connecting large enterprises to the payments ecosystem, regardless of their existing IT infrastructure. Through a single connection to Imburse, enterprises can collect or pay out using a variety of payment technologies and providers around the globe.
In a world where consumers payment preferences and technologies are ever-evolving, Imburse works with insurers to future-proof their payment requirements. Regardless of the business area, market, or requirements, Imburse will connect you to your choice of technology and provider.
Reach out to our team below should you want to discuss how Imburse can help you. Our team is happy to show you what our platform can do for your business and offer you a free demo.