Understanding digital wallets and their use

       

Carl Bower

Digital wallets and payment systems are quickly becoming the new norm for payments at the point of sale as well as innovations led by payday lenders. The idea of people carrying cash and even paying by cheque is simply something that does not occur with the same frequency that it once did. As a result, there are many companies today that are opting for plastic and digital only initiatives at their point of sale. If you are in the modern business world and you are not familiar with digital wallets and payments, you could be missing out on a large audience of customers in your industry. Here are some top facts on understanding digital wallets and payments that you can use to gain an edge when using them both as a consumer and a business.

Small but growing market

There are a number of digital payment providers online that have definitely taken the lead when it comes to delivering some of the best service. While there are many payment processors for credit cards and other services, when it comes to digital wallets some of the biggest providers are currently only a few companies. This is unlike the market for payday loans.

Mobile first

As some of these online in digital wallets allow customers to spend cash on their phone as well as in stores and online, they are creating much more versatile forms of payment than ever before. These are the leading companies that are allowing individuals to go without their physical wallets for the first time. They can store everything from online digital currency from the platform to credit card information. What these big three have enabled is the chance for customers to simply pull up their phone at point-of-sale and have the option to pay for any purchase just as they would an application or digital file in the app market.


digital transactions on your mobile

Real world to virtual world

In order to help customers with this transition as well as to increase security leaders in this market a few tech giants are also releasing a physical wallet card. Utilising the physical wallet card is ensuring that even point-of-sale terminals that don 't allow tap pay or pay by the application will still be able to offer point-of-sale with their system. Using the physical real wallet card is now enabled anywhere where customers could pay with a credit card.

Borderless transactions

Digital point-of-sale terminals are running into a problem for many existing retailers and a few companies have created applications that are making the process of accepting various digital wallets much easier for the average shopfront. With the assistance of the point of sale tools and the application it is now possible for many businesses to have a point-of-sale terminal that can very quickly accept digital forms of payment and with very low transaction fees.

Cities leading the world in digital wallets and payments

  • London
  • Singapore
  • New York
  • Silicon Valley
  • Chicago
  • Hong Kong
  • Zurich

A lot of firms in these niche areas are backed by major players in the tech industry and they are available for small businesses that would like to have the ability to swipe cards as well as take digital payments. Alternatively, merchants can take payments via a virtual terminal which is what providers of online payday loans do. Every merchant using these services can accept secure and extremely reliable digital payments without having to pay for an extensively expensive debit or credit card processing machine.

Combination cards

Combination cards are a fairly new concept that is an interim step to a fully digital wallet. The aim of this new initiative is to allow just one single card to take over the same function as every other card that 's in your wallet. Imagine having the convenience of one card that could carry all of your loyalty rewards card information, all of your debit card information and all of your credit card information. Essentially your wallet could shrink down into just one card that you carry along with you for your mobile phone. Having the availability to accept the coin card is a retailer can help to make this new retail possibility into a reality. Adoption is important for shop owners if this is a concept that will succeed. Ultimately this concept will become redundant as near field technology becomes more and more accepted as the new norm.



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Diverging strategies

Another concept that is important to consider is a wallet credit card system which is considered to be an alternative to both point of sale support or the combination card. This new concept is designed most specifically for use outside the United States with an international audience. Entire system has been built from the ground up with a series of commercial pressures. As in the UK the standard is to have a chip and pin system alongside a magnetic strip, this option allows for this extra level of security and ensures that no matter what type of payment processing is commonly used internationally, payments from digital wallets will still be accepted. Where this will go in the future will perhaps stem from which company or companies are driving the supply in conjunction with consumer uptake and merchant demand.

Future today: Near Field Communication (NFC)

NFC through tap pay has become a very popular option for scaling down wallets and allowing customers to pay using only the information that 's on their cell phones. Popular applications available on mobile devices can store all of the credit card information and digital wallet information from customers so that they can very easily pay through their phone at the point-of-sale.

The way that this works is by sending NFC payment information directly into a digital terminal like a debit machine or a point-of-sale. Phones with NFC technology can link directly to bank accounts, debit cards, credit cards and more. NFC technology also remains relatively secure thanks to the use of fingerprint technology or facial recognition technology which is now present on many mobile phone 's. Before making a payment a customer must first tap their fingerprints on the phone to verify that the transaction is completely secure. The use of NFC technology is becoming much more widespread but the good news for storefront owners is that the technology required to accept payments through NFC really just involves a modern debit or credit machine that accepts tap pay. NFC chips in many modern credit cards used the same type of technology to relay payment info.


swipe, tap or insert to transact

Emerging alternative applications

Another emerging player in the mobile market are companies designing pay apps for carriers. Some companies an application for smart phones and tablets to take credit card payments at point-of-sale. This complex technology is offered alongside a chip and pin reader that is available for around £100. Competition services are offering some mag strip readers for free as part of their service, the big problem that many retailers are running into is that mag strip is not the standard internationally for payment processing. In some parts of the world where chip in pin is required this small reader for £100 offers a fantastic point-of-sale solution that will work at any point-of-sale in any part of the world.

Walled gardens

Some developers are now creating proprietary and non-transferable digital wallet applications that are designed to launch with top branded phones as soon as there are released. Only a few manufacturers specific applications have come out but it 's likely that we are going to see a series of other digital wallets which come as a standard launch application on a specific phone model or from one particular provider. The actual applications used in credit card processing may vary in the future but each one will have to offer a standardised level of security and the same technology for payment processing so that retailers can continuously process payments regardless of the model of the phone or the carrier that a customer is using.

Cryptocurrency

Cryptocurrencies are the latest buzz concept. You may have heard about it but not a lot of people really understand the phenomenon. In fact not banks, governments and many companies are aware exactly how to treat it.

Bitcoins remain at the very top of the crypto currency marketplace however. This form of all digital anonymous currency is mined and traded using only digital wallet 's it 's not tied to any other type of currency worldwide but it can be traded for substantial value today. Bitcoins and percentages of the coins are now freely tradable through many online retailers as well as physical retailers. The big problem that many retailers run into however is the act of transferring bitcoins into their native currency.

Fully digital payment processing for Bitcoins in the future could mean an easy transfer to an online digital bitcoin wallet for retailers or even a chance that the bitcoins they receive at the point-of-sale could be converted into their currency based off of the exchange rates currently available and then transferred into their financial accounts.

Currently accepting Bitcoins doesn 't involve any type of financial or bank intervention but with the right application and currency exchange the bitcoins that are converted could turn into profits for a company at point of sale.

The blockchain is a public ledger of economic transactions that all participants can see and verify. With this extremely transparent reconciliation facility, trust can be created and hence value.

Ethereum is an alternative cryptocurrency that shares the concept of the peer to peer and blockchain with Bitcoin but has a more general scripting language with the associated greater scope for development and evolution.

The rise of cryptocurrency has led to increasing uses in all areas of the virtual world including the criminal. The lack of a physical audit trail to real life human beings has been criticised for allowing criminal transactions to take place in the so called dark web.

Conclusion

With so many revolutionary changes to digital wallets and payment processing. It is very important that any small or large retailer understands how to keep up in the market. Learning more about these applications and the newest forms of payment can help to make sure online companies and physical retail locations are able to offer the newest technology for improving sales.

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