We will soon be forgetting the famous faces on the banknote bills. Get up to speed up the future: The Digital Wallet
What is a digital wallet?
It is an account we set up with a service provider that digitally mimics our physical wallet. Apart from money, it could contain information associated with our credit cards, bank accounts and loyalty cards. Some digital wallet services for example also let us electronically store movie tickets, completely replacing our physical wallet.
Since the digital wallet is an account, it has to be accessed. This can be done with a device, such as a mobile phone, or by typing our credentials into an app.
Why should we use digital wallet?
Anything that makes selling easier is always welcome. An increasing number of customers are using digital wallets. Surely we do not want to turn away a customer because we have limited ways to accept payment. If we own an online business, we know that nothing is more aggravating than shopping cart abandonment, or the act of customers adding products to the shopping cart, and then exiting without completing their order. Digital wallets can mitigate abandonment to some extent. They pre-fill all the fields in the payment form, so checkout is a breeze.
The Benefits of a Digital Wallet for Our Business
The convenience that digital payments bring in has been one of the most prominent reasons for their widespread usage today. Not only are electronic payments more eco-friendly, but have also replaced the hassle of carrying and managing paper cash and vouchers with easy interface and seamless transactions. Companies that have digitised their corporate expense management enable their HR ‘s to distribute vouchers to their employees through click-based processes. This introduces greater efficiency for the organisation through a minimisation of expenses related to printing, inventory management and logistics, whilst also drastically cutting down on the time taken to complete the distribution.
Such convenience is particular helpful in case of managing corporate disbursements to business functions such as sales, which often incur frequent expenses on account of their professional responsibilities. Digital vouchers and e-wallets are also 100% compliant with RBI and tax norms. As such, corporate remittances made through digital vouchers do not contribute to an employee’s taxable income, leading to greater value addition and more savings for the employee. Organisations too can gain tax exemptions by showing digital reimbursements against their expenses. Moreover, with their smartphones becoming the repository of their digital currency, employees no longer have to remember carrying bulky booklets in their pockets or count coupons/cash while making payments.
2. Greater visibility and control over payments
Tracking paper-based expenses can often be a big concern – for both individuals and business organisations – and often leads to discrepancies in expense management. Digital wallets cut through the hassle of dealing with multiple service providers by providing a single dashboard for every user transaction. This grants users greater visibility about their day-to-day transactions and allows them to keep a tab on their monthly expenses.
3. Increases security
Physical wallets that get lost or stolen are almost impossible to recover, as is any cash or vouchers that one is carrying within. There is also a very tangible risk of critical financial instruments such as credit or debit cards falling into the wrong hands and being misused by unauthorised individuals.
Most digital wallets and voucher programmes do away with such security loopholes through PCI-DSS compliant frameworks and password-protected services. Other security features, such as a two-factor authentication protocol, are also included to make the digital medium of transaction much safer for the end-user; since the OTP is generated within one’s phone, it becomes highly unlikely that an unauthorised party can make transactions through the wallets. Furthermore, users can easily block their wallets and change their account login credentials in case they lose their smartphones, allowing for secure usage without a breakage in the payments experience.
4. Interoperability and increased flexibility
While they were earlier incepted as a medium to facilitate online transactions, digital payments tools such as wallets and e-vouchers have today ventured beyond just the online domain. With attached physical and digital cards, wallets allow users to make interoperable payments to online and offline vendors. Several vendors, especially bigger chains, today are also using NFC-enabled POS devices that allow digital vouchers to be accepted at offline outlets. This increases the usage flexibility and the potential use-cases for digital transactions as opposed to paper-based transactions, which are severely limited in scope and outreach.
Staying Ahead of the Curve!
Accepting digital payments goes well beyond convenience. It’s setting the standard for transaction processing, security, and travel industry growth for many years to come.
As this technology continues to expand it just may become as useful as so many other inventions that were at first frowned upon and now cannot be lived without. The opportunities seem limitless as digital wallet applications could expand beyond simple over-the-counter consumerism and into transactions such as real estate closings, mortgage, utility and educational payments, fundraising and donations, transferring funds, medical payments, portfolio shifts, high end purchases (i.e. cars, jewelry, boats, etc.)
Whether we like it or not digital wallets are the current technology of future pay. We need to keep an eye out for how these applications that may apply to us and hop on the mobile, crypto and/or digital pay bus.
- Khurana A. (2015). What Digital Wallets Mean for Small Businesses. Retrieved from https://www.mastercardbiz.com/2015/03/19/what-are-digital-wallets-and-what-do-they-mean-for-small-businesses/.
- Landry Jr. D. (2017). Digital Wallet: The Future of Pay, and Why You Should Care. Retrieved from https://www.business.com/articles/digital-wallet-the-future-of-pay-and-why-it-matters/.
- Williams A. (2016). 5 reasons e-wallets and digital vouchers are good news for HR. Retrieved from https://www.peoplematters.in/article/compensation-benefits/5-reasons-e-wallets-and-digital-vouchers-are-good-news-hr-13533.
- Retrieved from: https://due.com/digital-wallet/.
- Erickson K. (2013). The Mobile Wallet: What it Does and Why it Matters? Retrieved from: https://www.credera.com/blog/management-consulting/the-mobile-wallet-what-it-does-why-it-matters-and-5-different-approaches-to-consider-when-picking-a-provider/