12 Feb WHAT ARE DIGITAL WALLETS?
A digital wallet refers to an electronic device, online service or software application that allows individuals to securely store and access debit cards, credit cards, money, loyalty cards and other credentials for transactions and identification. Top providers of digital wallets enable users to make electronic commerce purchases directly from a smart device.
Keep in mind that digital wallets come in various forms. Options may be provided by smartphone manufacturers as proprietary native apps such as Apple Pay and Google Pay. Banking and financial institutions also offer their branded wallet apps to accountholders for mobile payments. Also a host of technology companies provide digital wallet platforms through standalone apps or web browser extensions, such as PayPal and Amazon Pay. These connect with users’ credit/debit cards for fund transfers.
Retailers like Starbucks promote their own apps to apply gift cards and rewards program balances to in-store checkout purchases. Users simply scan or upload their existing card credentials when setting up their preferred digital wallet app to connect them into one portal. Biometric authentication methods like fingerprint, face ID or iris scan add security.
Sample core capabilities a digital wallet offers includes near-field communication (NFC) tap-to-pay at checkout counters, peer-to-peer money transfers, coupon/loyalty redemption, transaction history reporting, adding multiple payment methods under one account, and ID storage for airport security and age verification uses.
Advanced features in some digital wallet apps include international remittances, cryptocurrency support, investment platform integration, small business expense reporting, and open banking functionality to view full financial profiles across bank accounts.
The main benefits of digital wallets to users include convenience, speed, security, and ability to control their credentials via a single app. Merchants also avoid liability shifts for fraudulent purchases with many providers.
As more users now expect mobile-first, cashless and cardless payment experiences, digital wallets become instrumental to the global transition towards truly digital economies and financial transactions. Over 8 billion digital wallet transactions were estimated to have recently processed in a single year across retail, bill payments, transportation and entertainment sectors according to recent data.