eWallets have already proven to disrupt how consumers are shopping online and in-store today. With companies like Google, Apple, Lemon Wallet, Square and other alternative payments already integrated in this space, we are seeing a shift from traditional (physical) payment methods to new technologies. For some retailers who have yet to adopt eWallets in their online stores, the thought of a digital wallet can be daunting. However, retailers who haven’t already must familiarize themselves with eWallets as these online payment alternatives are continuing to grow in popularity.
Before expanding on how eWallets, or digital wallets, are affecting online payments worldwide, it’s important to know that these terms describe a range of technologies much like how you would use the blanket descriptor credit card for payments made with Visa, MasterCard, Diners Club or American Express. Essentially, an ewallet, whether it’s being used in a physical or ecommerce transaction, is based on encryption software that substitutes for any payment methods found in a traditional wallet during monetary transactions.
The Convenience of eWallets
The growth in popularity with both consumers and merchants may be attributed to the convenience associated with utilizing this technology. Users have ability to store credit card information, coupons, loyalty cards, tickets and even subway passes in their digital wallets, effectively eliminating the traditional checkout process. Form fields, which would normally be quite lengthily, are replaced with the input of a password.
Giants in both technology and payment verticals have turned the concept of digital wallets into reality, with players like Google and Apple leading the pack. This technology has even attracted traditional payment methods in established markets, such as Visa and MasterCard, who have begun investing in eWallets of their own. Mario Shiliashki, Vice President of MasterCard, claimed that the invention of eWallets would “help [MasterCard] grow for the next 10, 20, 30 years, even faster than [they’ve] grown in past decades.”
In addition to user convenience and rapid expansion for eWallet creators, the technology provides numerous benefits for ecommerce retailers looking to expand their reach, encourage conversions and protect themselves against fraud.
By allowing online shoppers to pay using their eWallets, merchants can streamline their checkout for customers on all platforms, taking advantage of the fastest growing payment type around the world. This is exceptionally important for mobile shoppers who often abandon their carts due to a lengthily checkout process. In fact, 63% of 18 to 34 year-olds are comfortable using their mobile phones to make purchases. If your target audience falls into this age category, not having a streamlined checkout could seriously hinder conversions.
The Security of eWallets
In addition to reaching new customers and removing checkout barriers, eWallets provide merchants with a level of protection that is unseen in traditional payment methods. Each digital wallet is encrypted and in some cases, even protected by a private software code- a huge advancement in security against online fraudsters. Some makers such as Apple Pay, who is a leader in this technology, even offer a service where users are able to remotely freeze their wallet in the case of stolen phones. This provides customers with confidence to shop remotely, knowing that they have access secure mobile payments.
Taking into account their convenience and security, the growth in popularity for eWallets is more than justified. By 2017, WorldPay estimates alternative payment methods will account for 59% of all web-based transactions globally. This may be largely attributed to the growing use of eWallet technologies. Soon, retailers who have not adopted this technology will be placed at a disadvantage against their online competitors who offer a streamlined checkout, mobile friendly payment options and the bonus of added security. While traditional payment methods such as credit cards still reign as the most utilized payment method, eWallets have already proven to disrupt how consumers are shopping online and show no signs of leaving.