Digital Wallets Are Now the Web’s Favourite Payment Method

We are living in an increasingly digital world, affecting all of our habits, including spending. As the internet landscape continues to develop and becomes easier to navigate, more people than ever are opting to use digital wallets over traditional payment methods, elevating this payment type to become the most popular in the world. 

These payments are mainly facilitated via e-commerce or point-of-sale (POS) transactions, and have no doubt been spurred on by the increased precautions resulting from Covid-19. As digital wallets become more accepted by users of all ages and spending brackets, small and medium businesses can start accepting these payment options to take advantage of this growing trend.

What Are Digital Wallets?

Digital wallets are applications that can act as a bank account, debit card, and credit card all in one. They enable anyone to store their value and payment credentials, and make it seamless to transact or send value to another user within the network. They can be used in-store or online, and facilitate transactions without the need for cash or a physical card. Digital wallets are available on computer or mobile phone, making them highly accessible and customisable based on the end user's needs.

There has been a steady decline in use of physical means of transfer, but this trend was greatly exacerbated over the last year in particular. According to FIS, a financial services firm that performs retail analytics analysis, cash as a proportion of POS spending fell from 30.2 percent to 20.5 percent from 2019 to 2020, a previously unheard of year-over-year decrease. During the same period and in a competing category, digital and mobile wallet spending increased from 21.5 percent to 25.7 percent. As mobile wallets offer more perks and accessibility to users, these directional metrics will likely continue to widen.

How Businesses Can Make the Most of This Trend

Whether you are a brick-and-mortar shop, an established franchise, an online retailer, or anything in between, introducing digital wallets into your business model can represent an effective way to increase your income streams. If you own a store, many digital wallets have merchant-focused applications that make it easier to begin accepting payment directly from customers at your location. 

The process can be even easier if you're online, with integration taking a few clicks as you copy the merchant platform API into your storefront. By introducing additional payment methods, you give more options to users, which can result in greater sales. You will also attract more users who may have previously ignored your store based on available spending options.

Digital wallets enable a fast, easy, and safe way for consumers to spend. Merchants can easily integrate these wallets into their stores, allowing for a smooth transition as consumers make it clear that digital wallets are their preferred form of payment. With digital wallets offering many perks that cash and physical cards can't offer, it's no surprise they are taking over the global retail and e-commerce markets.