Our lives have changed by the new digital reality. When individuals learn, work, rest, buy and manage their finances with the aid of nanotechnology, the same event has happened once more.
Why digital wallets are well-liked worldwide
Trends in technology in the digital wallet
Business success and digital wallets
The past two years have demonstrated that we are progressively moving away from another antiquated item — a leather wallet filled with paper money, in favour of an electronic one.
You must carry all bank and discount cards with you and memorise your personal identification number (PIN). You may also save your hotel room keys, gift cards, boarding passes, tickets, passports, and other important documents in this fashion. Installing such an app on a smartphone or computer is required. After adding all the information for payment cards to the wallet, you may pay for any services immediately in-person or online.
Several businesses, including Due, ApplePay, Google Pay, Samsung Pay, PayPal, Venmo and AliPay focus on the digital wallet, frequently referred to as electronic money wallet and crypto wallet. We will discuss digital wallet, as it relates to money that you may have on a plastic card or account.
The whole world's population made 779 billion digital payments in 2020 alone, and this figure will rise by 13% in the coming years. In countries where cash is still widely used, digital payments rose, especially among elderly consumers. According to researchers at Mordor Intelligence, by 2025, digital wallets will take the place of cash, as people are so used to these conveniences.
China has the highest coverage of e-wallets in the world, with 47% of the population use mobile payments. Norway, the UK, Australia, Columbia, USA, Singapore, and Canada were just a few of the top 10 countries using e-wallets. Not all nations have adopted e-wallets because of issues such as people's time, technical literacy and how fast they can adapt to new technology.
Biometric authentication - People are afraid of making payments online since 2020, the year of the cyber pandemic. At that time, only UAE had seen a rise in online fraud of at least 250%. There were 18 million recorded data leaks in the first quarter of 2022. Security is still a major concern and one of the primary reasons why individuals are hesitant to use digital wallets.
By 2023, identity verification points will replace authentication systems in more than 50% of big organisations, as people trust this technology. For instance, Face ID, an infrared 3D face recognition technology has long been the standard for all new Apple devices in place of Touch ID. Biometric authentication ensures a more trustworthy verification of users' identities to make it impossible for fraudsters to access.
Previously, a combination of distinctive digits inscribed on the card could be used to find a bank account number. This method was abandoned in favour of the safer international EMV standard, which calls for the inclusion of a chip and codes on each card.
A QR code is an innovative tool that allows customers to pay for goods and services without using a wallet.
Customers scan a code on their phone, point their phone's camera at the "black and white" square, scan it, and after a few seconds, they can enjoy their goods. The code can be displayed at the register in actual stores so that customers can pay without using cash.
Mobile point of sale (mPOS) becomes more commonplace. By removing the need for pricey hardware purchases, digital wallets might completely change how brick-and-mortar retailers operate. Experts foresee the growth of mPOS. To pay for products or services, this is a smartphone or tablet used in place of a cash register or an electronic payment terminal.
Juniper Research predicted a great future for it, estimating that by 2023 the number of mobile transactions will almost triple compared to 2018 and amount to 87 billion. A typical point of sale (POS) terminal has a desktop computer, receipt printer, credit card reader, and scanner, but an mPOS eliminates all that hardware.
Ordinary speakers that are smart house assistants may play music, tell the weather, and converse with their owners. Smart speakers, according to experts, will change the banking industry. More consumers rely on these gadgets to place home delivery food orders or make cab calls. Additionally, consumers are beginning to buy food, home goods, and even clothing online.
The statistics provided by the consulting firm OC&C Strategy Consultants attest to this reality. Voice payments have seen significant development. The report forecasts that by the end of 2022, the value would reach $40 billion. Only 28% of people now trust internet voice transfers, while the remaining 72% are unsure of how secure this process is.
Despite this obstacle, smart speakers appear to have a bright future. More than 4.2 billion digital voice assistants are already being used on devices globally, according to Statista. By 2024, that figure will quadruple.
People need to have an access to the best security to eliminate doubts about the reliability of online payments.
Banks are the owners of billions of consumer records, including contact and personal information, as well as payment information. They must safeguard this information from fraudsters who want to utilise this for their vested interest.
A real-time security system of this kind can identify questionable transactions and alert the owner of the bank account. The alert might be in the form of a bank SMS, informing the user if they made the payment. As a result, a financial institution will move swiftly to address illicit activity and avert a severe incident.
The main method for developing digital wallets is the cloud. It can scale, conduct complex computing operations, and it has built-in security. The cloud enhances digital wallets in the following ways:
It provides additional protection - Although a payer's private information is already encrypted in an app, cloud-hosted digital wallets provide even more security. This was assured by the Payment Card Industry Data Security Standard (PCI DSS).
It speeds up transaction processing - The convenience of clients is directly impacted by how fast payments are processed. Even if the use of the plastic cards has sped up the payment process, payment terminals still require time for authentication and verification. Cloud digital wallets make it possible to complete this process, in just a fraction of a second.
A digital wallet is not tied to one device. Regardless of the device, the cloud enables you to safely store payment information in a central virtual repository. Smartphones, tablets, and smartwatches may all be used to make purchases. Strong biometric authentication ensures that unauthorised users cannot access these devices even if they are lost or stolen.
It integrates the wallet with a blockchain. Singapore Airlines' KrisPay is a mile-based digital wallet, where participants earn airline miles and exchange them for tokens that can be used at retail outlets. By doing this, the airline hopes to boost its brand recognition and get more users to build customer loyalty. An appropriate setting for integrating wallets with cutting-edge technology like blockchain is provided by the cloud.
Over 60% of US online retailers provide at least one integrated digital wallet. Google Pay users are 65% more likely to finish the booking process and have a twice greater conversion rate than those who use credit or debit cards. The use of this technology has sped up checkout times and increased customer traffic.
The switch from paper money to digital money is facilitated in large part by all of the aforementioned phenomena. People are making contactless payments for items, as evidenced by the years 2020 to 2022. In a small format, payer information is securely stored in a digital wallet. You can conveniently pay and send money to other countries. Customers who use e-wallets may rapidly access account information and better monitor their spending. One may argue that a digital wallet increases both individual freedom and corporate growth, and increase opportunities.
