Lockdowns and remote work have changed how consumers purchase and pay for goods and services. In the near future, we won’t ever have to say “Oops, I forgot my wallet”. Here is a picture of our lifestyle with digital wallets, also known as a mobile wallet or an e-wallet. We can now pay for our daily expenses simply by using mobile phone apps. The app enables us to buy a coffee or a quick breakfast before work, and we can even earn rewards for doing so. With just a few phone swipes during coffee time, we can order some groceries for dinner or purchase items from our favorite brand.
With digital wallets projected to rise to 52.5% of transaction value in 2025, it’s critical to understand the following;
- What are digital wallets?
- The benefits of using digital wallets
- The drive behind using digital wallets
What are digital wallets?
Simply put, a digital wallet is an online service or software program that allows an individual or business to conduct electronic transactions. It is also known as a mobile wallet and secures the user’s payment method. With an e-wallet, consumers can now make purchases directly from their devices, such as a smartphone or smartwatch.
The benefits of using digital wallet
Digital wallets have many advantages over traditional wallets, and they may eventually replace them as technology advances. Here are three valid reasons to get you started.
Convenience is one of the main reasons people use their e-wallets! With it, you can easily checkout, whether you’re shopping online, in store, or via an app. Most digital wallets also allow you to transfer and request money from friends, making bill splitting easier than ever.
The use of digital wallets is one of the most secure methods of payment. Digital wallets encrypt your information and create one-time codes for every transaction you make, reducing security risks. To make a purchase, the digital wallet’s settings can require authorization, such as a passcode, Touch ID, or Face ID.
Contactless payments have grown in popularity in recent years, and many people want to be able to pay without touching anything. When you use a digital wallet, you can make contactless payments even if you don’t have a contactless card. Paying with a digital wallet is also faster than using a card. Simply take out your phone and confirm the payment with touch or Face ID. No more fumbling for the right card and entering your pin. Your digital wallet truly eliminates the stress of checkout.
Why digital wallet adoption is increasing
By the end of 2022, the number of people using digital wallets is expected to reach 3.6 billion, which is nearly half of the world’s population. It is expected that the market for mobile payments will reach $15.69 trillion by 2028. The simple and secure end-user experience keeps users interested in digital wallets. As a result, merchants and issuers are adopting and providing electronic wallet services. Taking a look at the different players in the digital wallet space, we can identify the drive behind their popularity.
Digital wallets will continue to grow in the future
Digital wallets’ role will continue to grow in the coming years. The smartphones, tablets, and wearables already play a significant part in the lives of billions of people around the world. Digital wallet adoption will increase as end-user convenience and security improve.
However, the digital wallet domain will remain versatile because of the behavioral differences of consumers, the differences between regions, and the lack of a solid solution that appeals to all market participants. As the digital wallet market becomes more competitive, providers must differentiate their products based on the environment of their target audience. After all, it is the customer’s experience and the features that make a digital wallet service successful.
Written by: Rim Ghandour