Living in an era where technology reigns over every aspect of life, it is expected for new technologies to emerge in the world of finance, taking the convenience of making payments in these modern days to a whole new level.
Digital wallets, or e-wallets as some may refer to them, are definitely one of the revolutionary payment methods we are talking about. While a digital wallet makes a customer’s life much easier, it has the potential to transform a business as well.
So what are digital wallets, how do they work, and what benefits do they promise a merchant?
What Are Digital Wallets?
A digital wallet is a digital payment method that can be processed using a smartphone or a point of sale (POS) device. They are online platforms or secured apps used for money management.
As a merchant, you can think of it as an electronic card, but instead of customers swiping their cards, they will tap their phone on the POS machine. The phone they tap has an application with their card information or an app with only cash they transfer from their bank account.
Ewallets are used to accept payments online or in-store, giving you the ability to make more sales.
How Do Digital Wallets Work?
To offer your customers the option to pay using digital wallets, you must obtain a merchant account.
Does your business already have the option to pay using credit or debit cards? If yes, then you already have an account. If not, and you are taking the first steps to transform your business to join the digital world, you must head to the bank and open a merchant account.
our merchant account will be connected to a virtual terminal, allowing you to accept and process transactions made through a digital wallet.
The bank will provide you with a POS device and enable it to accept the digital wallets your customers use for shopping. Yes, there are different digital wallets brands. Your POS machine must be enabled to accept the ones your customers prefer. It is up to you what your customers’ preferences are.
Just like card payments, the digital wallet payment will be sent to the bank. If there is enough money to cover the customers’ purchase, the payment will go through. All the accepted payments will be batched to be deposited in your merchant bank account.
How Do Digital Wallets Benefit Your Business?
Here is how you, as a merchant, can benefit from digital wallets:
Digital wallets are highly secured payment methods. This stems from the fact that they employ security options including, tokenization and secure sockets layer (SSL).
A Convenient and Quick Payment Method
This point isn’t all about your needs as a merchant. It is about satisfying your customers. Nowadays, customers no longer want to withdraw money and carry cash around. Some may not even be willing to carry a wallet or a credit/debit card.
They love carrying their smartphones, though. So, enabling them to pay using their phones will give your business a huge competitive advantage.
Digital wallets will allow you to expand your business by enabling you to reach new customers. It will make it easier for you to set up an online store and accept payments.0