2023 witness the rise of digital wallets

Today, we can only pay for our daily purchases through digital wallets. On your way to work, you can use the app to grab a cup of coffee, buy a light breakfast, and earn points. During coffee time, you can order groceries for dinner or shop for clothes from your favorite brand with just a few swipes of your phone. This is our lifestyle with digital wallets, also known as mobile wallets or e-wallets.

People love using digital wallets because they are safe and easy to pay with. The pandemic has accelerated their use as digital wallets offer a contactless payment experience. This rapid growth is likely to continue for the next few years.

What are digital wallets?

Simply put, digital wallets are online services or software programs that allow individuals or businesses to conduct electronic transactions. They securely store user payment methods and are also known as mobile wallets: Personal identification documents as credit cards, driver's licenses, airline tickets, various coupons, etc.

1. Digital wallet 1 (Apple Pay):

Apple Pay is Apple's mobile payment service, also called "digital wallets." Like the Apple Watch, Apple chose to name the service "Pay" after the Apple symbol, although the company also calls it "Apple Pay."

Apple Pay has undergone a major transformation since the launch of the iPhone X because these iPhones have Face ID facial recognition instead of Touch ID fingerprint authentication. Face scans are used instead of fingerprints to verify payments.

To keep transactions secure, Apple uses a method called "tokenization." This prevents the actual credit card number from being transmitted over the air. Apple also protects payments with Touch ID or Face ID on compatible iPhones and continuous skin contact on Apple Watch.

Apple aims to replace Wallet with Apple Pay, a one-step checkout process that eliminates the need to hunt through wallets to find credit and debit cards. Apple Pay builds on existing NFC technology and can be used anywhere NFC-based contactless payments are accepted.

Making online payments with Apple Pay is as easy as paying in stores, using the same credit card, and authenticating with Touch ID on participating apps that use the Apple Pay API. Using Apple Pay in apps and websites bypasses all the steps normally required when making an online purchase, such as entering shipping and payment information.

After the item has been added to the online shopping cart and the user has started the checkout process, they can select Apple Pay as their payment method. The shipping/billing address and username associated with the credit or debit card on file will be automatically populated, and the purchase will be confirmed via Touch ID. At that time, you can change information such as the delivery address, which is convenient when ordering gifts. Online payments with Apple Pay for the web follow the same process.

2. Digital wallet 2 (Google Pay):

Google Pay is a digital wallet linked to your Google account. Use it to send or request money with friends (similar to Venmo), make payments in apps, use it in stores and restaurants with your Android phone, and see it running Wear OS. You can see that the real reason you use Google Pay is because it's faster and more secure than using physical debit and credit cards.

Over the years, Google has added many features to the app. You can also use membership cards, gift cards, and public transportation cards to save and receive promotional offers for certain goods and services.

On both his iPhone and Android, contactless store purchases are only available on his Android smartphone. You must also be at least 18 years old and have a Google Account.

When someone pays you or you receive a cashback reward, the money is stored in your in-app balance and can be transferred to your bank account. After verifying your identity, you can access the funds in your account balance to make purchases or pay peers.

3. Digital wallet 3: Samsung Pay:

It is a mobile payment system that allows you to pay using your smartphone at retail stores. It's so common these days to have your phone in your hand almost all the time, so Samsung Pay lets you leave your plastic card behind and even pay with your phone.

Samsung Pay is more secure than physical cards because the actual card number is not stored. Simply put, Samsung Pay stores an encrypted version of your card number and sends it to payment terminals instead of the actual card number. The original card number is not stored anywhere on your phone, as this is a kind of virtual number.

Samsung Pay is not yet free, but reward points are awarded for making transactions using Samsung Pay. These points can be redeemed for a variety of products at many official Samsung Pay retail partners.

In addition, Samsung and its banking partners run various promotions from time to time. These range from cashback on every payment to extra reward points compared to the reward points your bank offers if you use a physical card instead of Samsung Pay.

4. Digital wallet 4 - PayPal

PayPal is a payment platform with a website and phone app that allows parties to pay by online money transfer. PayPal customers create an account and connect it to a checking account, credit card, or both.

Once the user's identity and proof of funds have been verified, he or she can send and receive payments via PayPal online or in-store. Millions of retailers, both online and in the physical world, accept PayPal payments.

PayPal also offers credit and debit cards bearing the PayPal name.

PayPal provides payment services to consumers and merchants who accept PayPal. Merchants use PayPal card readers in physical stores or enable PayPal as a payment option on their website.

Consumers can pay bills and send money relatively easily. Cash can be sent to any email address or phone number, regardless of whether the recipient has a PayPal account.

5. Digital wallet 4 - Zelle

Zelle is a fast, secure, and easy way to send and receive money from people you know and trust and small businesses using your US bank account. If both the sender and recipient are already registered with Zelle, it usually takes a few minutes at your financial institution or in the Zelle app.

Zelle is generally considered a secure method of transferring money because cell transactions do not require the sharing of sensitive financial information. Also, your bank or credit union should have authentication and auditing capabilities to verify that you are the person authorizing mobile phone payments.

Fast, convenient, and free, Zelle works just like cash. However, Zelle does not have the payment protection that consumers would typically expect from a credit or debit card to protect against fraudulent charges. For these reasons, Zelle should only be used to pay people you know and trust.

Use your mobile phone to make online purchases or send large sums of money to people you don't know well. Also, make sure your payment mobile phone number or email address is correct. This ensures that your money goes to the right people.

Conclusion

As competition in the market is expected to intensify, digital wallet providers are expected to consider differentiated services, taking into account the environments of target customers and merchants. The spread of virtual currency is also remarkable, and the number of holders is steadily increasing. Finally, a good end-user experience and compelling features are the keys to a successful digital wallet service.