How Digital Wallets are Changing the Way Small Businesses Grow?
Digital wallets are the latest buzz around payment solutions. But how can a digital wallet help your small business grow? Let's find out
With the ever-expanding internet connectivity and social media, digital wallet payments systems are getting quickly adapted by the overall shopping community. Digital wallets have witnessed a manifold increase in their popularity in the last few years, not just for convenience and security but also for the added benefits that attract both customers and businesses.
What is a Digital Wallet?
A digital wallet is a software or online service that enables individuals or businesses to make or receive payments electronically via the internet. It allows your customers to complete purchases quickly by allowing them to pay at the 'point of sale' i.e directly at your store or website. Simply put, digital wallets aim to replace the existing physical system of cash transactions with the digital, online version of wallets.
How does Digital Wallet Payment Works?
Digital wallets provide your customers with a virtual space to store their personal and payment information, such as bank account details and credit card or debit card information. Money can be added into these wallets through the customer's existing bank accounts or via credit/debit cards. Instead of bringing cash or mailing you a check, your customers can pay you with a single tap or click.
And how do these digital wallets offer security? Well, Google Pay, for instance, stores all the data in an encrypted manner and replaces the customer's information with a unique data strand, also known as a token, to make the payment. This token has no intrinsic value for you unless you’re a payment processor. To decipher it is out of the question, thus making it one of the most secured payment options for you.
Here are the 5 ways in which Digital Wallets can help your small business grow
Digital payment solutions emerged because of the need for a convenient payment option. It is needless to say how easy it is to pay through digital wallets compared to the labor of securely carrying cash everywhere. Online Shopping using credit and debit cards is a tedious task if you have to add a series of numbers, expiration date, and CVV code every time you make purchases. Even for your business, it is better to get paid instantly via digital wallets than to wait for mail-in delivery of checks from your clients. Most of the times Customers don't feel confident to share credit card details with new shopping websites. In that case, it's better if your website provides them with a secured One-Pay Click option. Moreover, platforms such as Online Checkwriter provides additional tools for keeping a proper record of all your financial transactions and even integrating them with a wide range of existing accounting software such as QuickBooks.
If you lose your wallet or purse with loads of cash, it is next to impossible to get it back with all the contents intact. Blocking your debit and credit cards is another huge problem with all the cumbersome procedures and verifications. On the other hand, digital wallets offer you a highly secured payment option with advanced encryptions. Payment also requires authentication and verification, which means the money in your digital wallet cannot be just easily spent by anyone. And even if you lose your mobile device, you can easily block access to your digital wallet by simply logging in with another device and freezing your funds. Chances are that you will just lose your precious phone and your money is secured within the digital wallet.
Attractive Incentives to Consumers:
While making payments through digital wallets your customers also receive a wide range of offers such as cash backs, coupon codes, and redeemable reward points. This helps your business by incentivizing customers to visit your store again in the future and to buy more. Some of the digital wallets such as Amazon Pay offers good rewards on recurring payments such as on electricity bills and telephone operator bills
Helps in Analyzing the Spending Behavior of your Customers:
Digital wallets store information about the spending history which can be used to analyze the buying behavior of your customers. They are a great tool for businesses that collect and sell consumer data. The more you know about your customers' purchasing habits, the more effectively you can market your products to them. However, this might be an issue of loss of privacy to consumers.
More than just a Payment Platform:
Digital wallets offer a lot of added features for businesses other than providing a payment platform. A lot of them such as G-pay, Paypal Wallet offer useful solutions like API integration, Bank Record Management. Some of the companies like ACH wallet even offer features such as an online cash register, invoicing, e-check, Check by mail, and several other utilities which are useful in today's digital way of conducting business.
On the surface, digital wallets might look like they are just payment solutions that happen through the internet. But they are about so much more than making quick sales of your product and getting money quickly and conveniently. Added features that they provide have proven effective in the growth of the business. Therefore they must not be taken as just another payment option that emerged due to technology.
Instead, you should take a holistic approach that provides a connected digital experience across all purchases to all your customers. This will enable your business to make repeated sales and present a professional image of itself.