The rising demand for e-wallets, why merchants must integrate it as a payment method, and the challenges of digital wallets.
E-wallets have become one of the primary payment methods in the world. As of today, a large portion of people engage in online purchases and pay through E-Wallets. E-Wallet payment methods are quickly overpassing other forms of methods in our payment system like credit cards and debit cards. Moreover, digital wallets are becoming a popular method for eCommerce stores, small and medium companies, and websites that offer online products and/or services.
The trends of e-wallets have increased with the trends of contactless payments that emerged with the coronavirus pandemic. Although digital wallets are growing in popularity, there are challenges associated with this online payment option.
In this article, we will explain the pros and cons of e-wallet; but first, let's understand what are e-wallets.
What Are E-wallets?
E-wallets are digital wallets. It is an electronic device, software program, or online service that enables a person to make transactions electronically with another person. This digital payment method can be found on an electronic device such as a phone or computer. They enable fast and efficient purchases online.
The majority of e-Wallets enables buyers to store their debit card payment information on a device such as a mobile. However, other e-wallets allow users to add cash to their digital wallet through the process of bank transfers.
There are numerous e-Wallets in the world. Some phones have their own e-wallet incorporated into their systems. However, it is also possible for users to install their own e-wallet of choice.
Advantages of E-wallet as a Payment Method
As mentioned earlier, there are pros and cons to using different e-wallets. Let's analyze the pros of using e-Wallet as an online payment option.
1. Reduces Friction For Shoppers
E-wallets offer customers a fast and simple way of shopping. Keeping things simple and to the point helps attract customers. When the shopping experience becomes complicated and slow, customers are more likely to leave. One of the main reasons why customers abandon their carts is because the payment process is too complicated. The more complex a payment is, the more likely it is that the cart is abandoned.
A digital wallet enables customers to have a simple and straightforward payment process. By adding wallet payment to your infrastructure as an online payment method, users can access a more customized experience. According to researches, adding eWallets can help improve the rates of conversion.
2. Contactless Payments
Another very convenient aspect of e-wallet payment is that the people involved in the transaction do not need to rely on physical contact with each other. After the covid-19 pandemic, e-wallets are growing in popularity as one form of contactless payments.
It has helped businesses to improve convenience, and payment security amidst the pandemic. With the inception of contactless payments, merchants can now depend on enhanced security and quick payments.
3. Mobile Payments
Mobile payments or payments conducted over smartphone applications have become a favorable method as it is easy and provides convenience. The global mobile payment market is projected to reach $8.94 trillion by 2027 exhibiting a CAGR of 29%. To enable transactions through mobile payment, customers need to set up a digital wallet on their devices.
4. Superior Security
Another advantage of the e-wallet as online payment is that it has superior security compared to other forms of payment options. It is necessary that you integrate a payment terminal from a reliable service provider that accepts payments from services of digital wallets.
Furthermore, to get access to a person’s eWallet, he/she will have to use his/her device. Allowing your customers to use their own devices builds trust.
Challenges of E-Wallet as a Payment Method
The adoption of digital wallets is likely to be picked up in the next few years. More merchants will provide services of mobile wallets as a payment option to access their products or services. However, there are challenges faced by merchants while adding mobile wallet as a payment method.
1. Accept The Right E-Wallets
There are plenty of eWallets in the world. However, most countries can only accept a specific e-wallet payment method. To be function properly and to reach as many customers as possible. It is essential for merchants to accept the right type of digital wallet. In the list found below, you will find the list of prominent online wallets accessed by their native users.
Kakao Pay – South Korea
Google Pay – Global
Samsung Pay – Globally and South Korea
WeChat Pay – China, APAC region, Singapore
Pay NOW - Singapore
Paytm/UPI – India
Go-Pay – Indonesia
Mpesa - Kenya
To be successful, merchants need to analyze the prominent mode of mobile wallets for each country. Many tech-savvy customers have grown comfortable using them and prefer them over traditional payment methods. Simply put, if you want to allow customers to pay with their method of choice, you’ll need to invest in technology that enables you to accept digital wallet payments.
2. Manage Multiple Payment Integrations
Combine multiple e-wallet payments can be burdensome. It can become complex and expensive, and it can waste a lot of time. To avoid setbacks, it is best for merchants to use an all-in-one solution. This way, they can accept mobile wallet
Digital wallets reduce friction for customers. They have superior security, and they do not require physical contact. In the situation we live in now, e-wallet payment methods offer some of the most significant benefits.
Regardless of the benefits, it has to offer, it also has some disadvantages. One of the biggest challenges is that the payment methods may vary from country. Some countries provide a specific type of e-wallet payment, and others offer another different type. Additionally, it can be challenging for merchants to manage multiple payment integration. The process can be difficult to understand, and it may be expensive.
Beyond that, consider what mobile payments could mean for your business and how mobile payments and digital wallets will grow in the future.