Digital Wallets- The Way Forward
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Going cashless – is the current trend, which has gripped the entire nation. The latest buzz around “cashless”, seems to be the in-thing now, thanks to us as a nation “going digital”. Revisiting the times when credit and debit cards were introduced first, people had a thought about these being the most convenient options for all financial transactions. This concept is now being replaced by entirely to the new “Digital Wallet” available across the online platforms.
Table of Contents
What is Digital Wallet?
Digital wallets are nothing but a technology that lets you have a digital version of your debit and credit cards on to your phone for online transactions. You can easily access your cards on the app wherein you can freely shop online and even transfer money. How to use digital wallet? All you have to do is hold your smartphone close to the payment terminal, or the second way, you could simply shop on your device using the app.
Apart from the general use of transactions through debit or credit cards, these wallets can also be utilized for storage of information that is associated your credit or debit cards, driver’s license, prepaid / bank accounts, loyalty card and even health card. Additionally, you can now carry out in-store purchases with the help of QR or NFC – Near Field Communication Technology and many such other technologies.
Types of Digital Wallets
Broadly speaking, digital wallets are of three popular categories as follows:
- One is the closed type of wallet, which is specific to the vendor. Vendors like Flipkart, Bigbasket, and the rest have their dedicated wallets for each customer. The cashback amounts & refunds are credited to these wallets. You can use them for your next purchases with the same vendor, but the money cannot be withdrawn nor used with any other vendor.
- There are other types of wallets that are offered by banks which could be used for purchases and also allow withdrawal of money from these. These are the open wallets which are, uncommon these days.
- The third type is the most common one, which is gaining popularity today, especially with the growth of the cashless economy- digital wallet apps like Paytm, Mobikwik, Freecharge etc. Your credits in these wallets can be used across a variety of vendors unlike that with closed wallets. These wallets, however, do not allow you to withdraw money like open wallets.
So why is all the hype around these digital wallet solutions? Here some good things that these wallets offer:
Why Digital Transformation is Important?
- Your card is in the cloud:
If you are paying with digital wallets at a physical store, you can use your phone and avoid carrying cards or cash. If an online purchase is being made, all one has to do is to log in your digital wallet account and pay from it directly. You can forget your card and make payments either through the mobile app or by sending an SMS.
- Saves time:
How many times have you got stuck on the payment page, racing against time to fill all your card details and complete the payment before the time runs out and the session expires? Digital wallets hasten this whole process. Fill up your digital wallet, proceed to make your online purchase from the online retailers, login to your wallet and make the payments in a jiffy!
- Not to forget the promotions and cashback offers:
Most of these digital wallets gained popularity mainly because of the impressive cashback and discount coupons they offered. For every transaction you make with the digital wallets, you get attractive cashback which you could later use on your other purchases. Some of them also offer discount coupons that could be used with other vendors.
- Easier accounting and finance tracking:
With so many credit and debit cards, so many cash purchases made every month, no matter how careful you are, you always end up losing track of the income and expenses in your account. But with the digital wallet revolution, it is so much easier. All your credit and debit information is available in one place. But, this is only possible when digital wallets become the main mode of payment.
- It all boils down to the convenience factor:
Several payments like paying electricity bills, travel bookings, mobile bill payments, and more can all be made by simply opting for one for the best digital wallet. So no longer standing in long queues for paying bills.
No more hunting for exact currency notes for making payments at physical stores you can pay the exact amount using digital wallets instead of carrying a bulky wallet.
Some places charge extra for the transactions that require a POS. A small percentage of transaction charges might be levied in some instances. But payments through digital wallets do not come with transaction charges.
How are digital wallet solutions beneficial to businesses? As the overall transaction time comes down, as the process becomes more convenient for users, cart abandonment issues, or failed transactions would not happen. Thus, it also helps to improve conversion rates.
Case Study : “Creating a digital solution available at your fingertips“
Installation and maintenance of POS (point of sale) devices are comparatively more expensive than accepting transactions through digital wallets.
At the physical stores, vendors too need not worry about tendering exact change, and this can also make the payment process much quicker.
On the downside, implementing digital transformation in terms of digital wallets is yet to undergo some crucial changes to eradicate the following limitations:
- Security issues:
The digital wallet providers should incorporate better security features. User data would be stored in the cloud, so implementing proper data encryption should be focused on. The security concern is, in fact, the main factor that makes most customers sceptical about using digital wallets.
- A limited number of compatible vendors:
Not all vendors and stores accept payments through digital wallets. Be it for online shopping or for payments at physical stores. Currently, there are not many vendors who have included digital wallet payment options.
If done right, if more vendors come forward to use digital wallet payments, if digital wallets continue to come up with better promotions, more users would be encouraged to use them. This would certainly revolutionize financial transactions into the ones involving digital transformation technologies.
Digital Transformation in Banking
The digital transformation concept has brought about a huge revolution in the banking experience of people. The best example for this is the digital wallet development company solution that has led to a great transformation in the financial services and how it works. Moreover, the technology has also led to the expansion of banking line by employing strategies which allow close interactions with the customers and know more about their preferences.
Retail Digital Transformation
How digital transformations are transforming markets? Digital wallet apps are now being utilized in retail businesses almost everywhere, mainly because of the tons of benefits that tag along with its usage. Retail distributors no longer need to face the never-ending queues of customers, thanks to the digital transformation ideas such as the NFS or QR technology. It has helped save lots of time since the customers now pay for their purchases within a couple of minutes. Transformations like these often play a crucial role in maintaining positive relationships between the retailer and customers. Not to forget, the great profit rates that follow along with digitalization.
Fuel Sector Digital Transformation
Why digital transformation? The Gas Station customers can now enjoy the full benefits of the new payment possibilities via mobile apps that let them pay their bills while sitting inside the car itself.
Technologies like these play a great role in time-saving as well as offering better customer care services. Additionally, it also boosts the brand loyalty as well as its recognition.
Digital Transformation Leads to Increased Visibility
Most customers, as well as business organizations, find it quite tedious to maintain a record of all the cash-based expenses. Even the slightest of negligence could lead to severe discrepancies while managing finance. Digital transformation focuses on eliminating such errors through digital wallets.
Read More : “Industrial Revolution 4.0: Top 9 Technologies in Detail“
You no longer need to keep track of paper-based records or even go for third party services for tracking each and every transaction. One of the major benefits of digital wallets is that it offers you incomparable visibility to view all your daily spends and keep a track on your day to day expenses.