At its simplest, a digital wallet is a piece of software that holds the buyer’s payment details and other key information, to allow for simplified purchases and other features via their mobile device or desktop.
The number, type and design of digital wallets has evolved considerably over the past five years. In the past 12 months alone, we have seen a real shift in the appetite of consumers to use them.
As more people purchase smartphones, access to digital payment methods is increasing and trust in them is deepening – particularly as credit card fraud is on the up. Card payment security relies on signature or chip and pin; by contrast, digital wallets can incorporate biometric ID and store a user’s payment details encrypted on servers.
Popular options
PayPal is one of the most recognizable digital wallets. Founded in 1998, the company and wallet are now available in 203 markets and 26 currencies. Recent innovations, such as ‘One Touch’, allow for simpler purchases for shoppers and potentially better conversion rates for merchants.
With the launch of Apple Pay in the UK earlier this year, customers can store their bank card details in their phones, enabling them to pay securely using their mobiles either in stores or online. This new addition to the mobile payments market has been supported by the vast majority of UK banks and building societies offering their customers the option to pay using this function.
Android Pay was one of the most recent launches into the space of digital wallets. While not yet available in the UK, the platform will also allow for in-app and in-store purchases via Android phones.
From a merchant’s perspective, accepting that digital wallets are a prevailing trend in consumer behaviour is fundamental if you don’t want to constrain your revenues. For a start-up or a mature business, finding a payment solution that allows you to accept the increasing multitude of ways to pay is critical.
Problems for merchants
However, the rapid pace of change and constant emergence of new ways to pay poses problems for merchants. It is critical to understand how your customers shop online and on their mobiles and find a payment solution that offers flexibility.
A business can assess its customers’ buying habits by going on a platform such as Google Analytics and discovering which devices and operating systems are driving the most traffic and sales. For example, if a company were to notice that shoppers on iPhone 6 devices were driving high volume on their site, they may consider adding Apple Pay.
Tech start-ups are embracing this shift. Braintree, the payment solution that helps merchants accept nearly every type of digital payment, has already helped businesses including Hungryhouse, JustPark, YPlan, Bar Pass, Top10, Bizzby, Mr & Mrs Smith and HotelTonight integrate payments to accept Apple Pay in the UK.
Structure and reach
Once you understand how your customers want to shop, consider the structure and reach of your business. If your business is focused on selling successfully in international markets, it makes sense to enable customers to pay in their local currency. Offering local currency makes buyers feel more at ease with your product.
Digital payment platforms such as Braintree take the problem of keeping up to date with a fast-paced and constantly evolving market out of merchants’ hands.
In a single integration – often just a few lines of code – business owners can accept every type of digital payment and stay up to date with new options as and when they come to market.
With the digital payments landscape changing at such a fast pace, offering the right payment methods will help businesses grow revenue quickly and easily.
Sarah Davidson is writing sponsored content for Braintree for Tech City News. For more information on how Braintree can help mobilise your payments and globalise your business, please visit the website.