Thanks to the ubiquity of smartphones, digital wallets are becoming one of the top preferred payment methods for consumers. Shoppers love the speed and simplicity of paying with their phones – more than half of Americans surveyed by Forbes said they use digital wallets more than traditional payment methods, and 64% said they use digital wallets as much as traditional payment methods.1
Businesses looking to maximize their revenue and conversions should accept the payment methods their customers want to use, which includes digital wallets. The result? You could capture more sales and improve your checkout experience.
Read on to learn how to accept digital wallets as a payment method and how to set them up. Plus, discover how you can drive conversions and sales through a single integration with PayPal.
A digital wallet, also known as an e-wallet or virtual wallet, is an app that makes it easy to store and use various payment methods. Rather than holding physical cards like a physical wallet, a digital wallet stores information: credit cards, debit cards, gift cards, loyalty cards, bank accounts, insurance details, concert tickets, membership cards and more.
In addition to storing data, digital wallets make it easy to use those accounts to pay with just a tap of a button, making transactions with small businesses simple.
Digital wallets streamline the payment process by leveraging technologies such as:
Security is paramount, regardless of the transmission method. Digital wallets typically safeguard user data with encryption and employ tokenization to generate a unique, one-time number for each transaction. Meanwhile, accessing a digital wallet may require authentication through facial recognition, fingerprint scanning, or PIN entry.
Once authenticated, users can select the digital wallet option at checkout to bypass entering card details manually when shopping online. For in-store purchases, users unlock their device, select a payment method, and position their mobile device near the payment terminal for a swift, contactless transaction.
Popular types of digital wallets include:
While these e-wallet examples vary in features and geographical reach, they illustrate the prevalence of digital wallets today.
Brick-and-mortar businesses can accept more contactless payment options using a point-of-sale (POS) device designed to accept wallet technology. Shoppers can then use their smartphone, smartwatch, or other NFC-enabled devices to select their preferred payment method from their digital wallet, and then hold the device near the POS reader to complete the transaction.
Want to make it easy for shoppers to pay with their card of choice when shopping online? For e-commerce, simply enable your site to accept digital wallet payments. Because customers’ payment information is saved in the digital wallet, you simplify the online checkout process.
With PayPal, you can accept contactless payments with ease. PayPal's payment terminal integrates with your entire checkout process, from digital wallet payments to Venmo to QR codes.
Offering checkout options like digital wallets provide several benefits for both merchants and shoppers, including:
In partnership with three expert business owners, the PayPal Bootcamp includes practical checklists and a short video loaded with tips to help take your business to the next level.
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