Technology has significantly impacted card payments over the past couple of decades. Contactless card payments proved to be a game changer, making for a speedy, convenient alternative to classic chip and PIN payments – with 9 out of 10 retail transactions now being made via contactless, according to data from Lloyds Bank.
But beyond contactless payments, digital wallet payments have emerged as a serious contender to become the most popular form of payment in the decades to come. You may not be familiar with digital wallet payments, but chances are someone you know – or someone who has shopped at your establishment – has used them to pay for goods and services.
So if you’re not in the know and want to learn more about the growing payment method, here are a few pieces of information you’ll find useful that will explain why you should absolutely accept digital wallet payments.
What is a digital wallet?
A digital wallet is an application housing banking information, which can then be used to make transactions, debiting the required amount from the bank in question. Popular digital wallets include, but aren’t limited to:
Users who install digital wallet apps to their devices and link their bank accounts can use them to pay for goods and services, simply by tapping the device on a contactless card machine in the same way they would with a contactless credit or debit card.
Do all card machines accept digital wallet payments?
Not all. Traditional chip and PIN machines are unable to accept digital wallet payments because the payments must be made with contactless. However, if a card machine is equipped to accept contactless payments, it will also be able to accept digital wallet payments – because the technology used to power the two is identical.
Why accepting payments from digital wallets is a smart move for businesses
Digital wallet payments are growing in popularity
The world’s first contactless mobile payment device was unveiled in China back in 2011. Since then, the technology has spread across the entire smartphone market, with virtually all smartphones able to make digital wallet payments if they have the correct apps installed.
Because of this widespread availability, many people the world over have adopted contactless mobile payments with their digital wallets and smartphones as their primary payment method, essentially replacing physical cards. If the statistics are anything to go by, the popularity of digital wallet payments isn’t set to slow down anytime soon.
According to research house Juniper Research, the number of people making contactless mobile payments with digital wallets is set to rise to over 1 billion in 2024 – an increase of over 200 million people compared to the same figures from 2022. This shows that not only are digital wallet payments incredibly popular at the moment, but this momentum appears as though it will continue throughout the next decade and possibly beyond. It is for this reason that businesses should prioritise the acceptance of digital wallet payments moving forward.
Digital wallet payments are more convenient than card payments
In a recent report by shopper insights experts Numerator, 82% of shoppers say convenience is ‘very’ or ‘extremely’ important to them. Meaning if businesses can help create the most convenient, relaxed shopping experience possible, they’re more likely to turn one-time customers into repeat customers and boost revenue. Accepting digital wallet payments is one way to do this.
As convenient as contactless card payments are, they’re still a step behind digital wallet payments using mobile devices. Most people will need to remove their card from their purse or wallet before they’re able to use it. Whereas the majority of the population need only remove their mobile device from their pocket to make a digital wallet payment. Skipping this small step creates a quicker, more convenient retail experience and a more pleasant experience for the consumer.
Digital wallet payments may become the most dominant form of payment
If digital wallet usage continues to rise globally at the rate it is now, it is not incredible to assume these payments may one day overtake the use of contactless cards in a retail setting.
According to data from Finder, 60% of the global population will be utilising digital wallets in some form by 2026, which presents a huge opportunity for a surge in contactless mobile payments using digital wallets. Given that around 85% of the world’s population owns a smartphone capable of making a digital wallet payment, according to data from Statista, there is every possibility that, as more people begin adopting digital wallets on their phones, usage of the payment method could skyrocket even further.
Choose a card machine provider experienced in digital wallet payments
While most contactless card machines can accept digital wallet payments, it would be wise for businesses to partner with a card machine provider experienced and knowledgeable in this specific payment type, so that any issues that arise as the numbers of these payments continue can be dealt with quickly and efficiently.
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