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Digital Wallets: The Future of Pay and Types

Ecommerce is growing every day. With it, there is an increasing demand for digital payment services such as digital wallets. Although they are comparatively new, the adoption rates for these services are on the rise. As such, this is the perfect time for creating a digital wallet with mobile app development.

Here’s some more data to help you get a proper idea of what a digital wallet is all about.

As per statistics from 2017, digital wallets were the second most popular choice for making online payments. The only method more popular was credit cards. Since then, the popularity of digital wallets has only grown. There has been a steady rise in the use of these e-wallets over the years. In 2018, the usage rose by 29% compared to 2017.

What are Digital Wallets?

Digital wallets are rapidly becoming the method of choice for consumers. After all, they make transactions effortless, transparent, and convenient. Most importantly, they tend to be safer. Moreover, they are available as Android apps and iOS apps.

To use a digital wallet, you must set it up first. This includes adding a credit card, debit card or bank details. This information will be stored by the wallet app securely. Whenever you need to make a payment, you can do so directly with the app. You will no longer need your cards or cash for the payment. The app will simply require you to verify your identity. Once that is done, it will process the payment.

This incredible level of convenience is why many are moving to e-wallets.

The Benefits

There are some major benefits that digital wallets offer.

  • Easy Payments: The biggest benefit is certainly a simple and straightforward process of payment. After all, all you need to do is click a few buttons and verify your identity. This is a lot shorter than paying with cards.
  • No Time Limits: You need to renew your cards every few years. This is not the case with e-wallets. Once signed up, you can use it whenever you want as long as you have an internet connection.
  • More Secure: Sharing credit card details is always a worry. This is not an issue with e-wallets. After all, the wallets never share your personal or financial details.
  • Speed: Digital wallets are rather fast. The transaction is processed in a matter of seconds. Credit cards take slightly longer. After all, you’ll have to put in the credit card details. Of course, bank transfers are the longest, ranging for a few hours to a few days.

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Types of Digital Wallets

Digital wallets can use a variety of delivery technologies to process the payment. As such, they fall into the following categories. Keep in mind that some wallets use more than one option.

  • NFC: NFC stands for Near Field Communication. Here, the payment data is exchanged between two devices located close to each other. For example, one can be your smartphone and the other a payment terminal. However, both devices must have the NFC tech.
  • QR Codes: Phones can easily scan QR codes to gain access to certain payment details such as payee information. As a result, the digital wallet can process the payment quickly. This method can be applied to retail outlets and online transactions.
  • Digital: Here, the entire process will take place online. As such, this is often used by e-commerce sites.
  • SMS-based: In this case, a text message such as one containing an OTP confirms the payment.

The Future

The future of digital wallets is certainly bright. There is sure to be further growth in their popularity and usage. According to some, they can even overtake paper currency. In fact, e-wallets and other non-paper payment methods can end up replacing paper money soon enough. This is a part of the wider push towards digitalization in the world.

In the immediate future, these wallets still have a number of challenges to overcome. The primary concern is still security. While digital wallets currently offer robust security features, they must keep improving. They need to incorporate the latest security tech to stay ahead of hackers and other bad actors.

For mobile app development, they must focus on the user experience. Better user experience will lead to increased adoption and retention. This is vital to the overall growth of e-wallets.

These days, e-wallets are limited in the scope of payments. They mostly focus on over the counter payments or transfers between parties. This is sure to change in the future with improvements in technology. With time, they can start to handle more complex transactions such as real estate closings, mortgages, and taxation. After all, both iOS apps and Android apps are becoming more complex and effective.

Closing Words

If you have an idea for a digital wallet, this is the time to get iOS or Android app development services for it. More people are using them. As such, you are sure to find users. Moreover, there’s a lot on the horizon for digital wallets in general.

Rushabh Patel

Rushabh Patel is the Founder and CEO of Siddhi InfoSoft, a leading web and mobile app development company focused on creating experiences that connect, perform & inspire. We believe in delivering perfect business solutions by adopting the latest and trending technologies for web and app development projects.

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