While many consumers today still reach for their plastic cards when making a purchase online, there is a clear trend toward digital alternatives. This shift will have many benefits for business owners: digital wallets provide a greater degree of security, help drive conversions, and make transactions as quick and easy as possible.
Truth be told, if you have an online business, you can’t afford to ignore digital wallets — in a competitive market, you want to provide the most secure and convenient options to your customers.
What Are Digital Wallets?
A digital wallet is a payment platform that securely stores a user’s credit card, debit card, or bank account information and then allows them to make payments without having to fill in long card numbers or remember multiple passwords. Instead, they can easily authorize payments using just a single password for their digital wallet. In some cases, this can even be done with a quick thumbprint scan.
Digital wallets, such as Apple Pay and Android Pay, can be used for in-store payments and online or in-app payments. For the sake of this article, we’re going to focus on the benefits of using digital wallets for online/in-app payments.
Here Today, Bigger Tomorrow
These days, consumers always have their phones on them. As a result, they are increasingly shopping from their mobile devices. Not surprisingly, adoption of digital wallets is growing. A 2016 study by Forrester found that 41% of consumers expected to be using a digital wallet for the majority of payments by 2021.
It all comes down to security and simplicity. Consumers are on your website or app, see something they like, and with just one click they can make a purchase — and you’ve made a sale. As a business owner, this is a trend that you simply can’t ignore. If your customers prefer to pay using a digital wallet, but are unable to do so in your app or on your website, they may take their business elsewhere.
Good for Consumers, Great for Businesses
For consumers, one of the main advantages of digital wallets is ease of use: hassle-free transactions without having to input all your payment information. For business owners, this translates to increased conversion rates — by providing consumers with a seamless and secure way to make online and in-app purchases, you can drive more sales.
This isn’t just optimistic thinking: research by Adobe Digital Index found a 10% increase in the rate of customers that completed their transactions after adding items to their online shopping cart when payment via digital wallets was available as an option.
Digital wallets also offer significant advantages to your business in terms of security. For example, by using 3D Secure, you can shift the responsibility for authentication to the card issuer or digital wallet provider. If a customer makes a purchase on your website using Apple Pay, Apple takes on the bulk of authentication, not you.
Harness the Growth of Digital Wallets
From online grocery shopping to placing coffee orders through an app, consumers are increasingly making digital purchases part of their daily lives. Digital wallets are set to drive this trend as they are adopted as a ubiquitous payment tool.
One of the joys of being a business owner is having the power to chart your own path forward. However, being in charge also means you have the responsibility to make good decisions based on where your business and industry are headed. Digital wallets aren’t going away, and as a smart business owner, it’s time to start paying attention.
Interested in learning more about digital wallets? Bambora can help.
Photo Credit: Shutterstock / baranq