Every day, technology increases by leaps and bounds as more people embrace its possibilities for simplifying their lives and helping them accomplish their goals. One example of this is digital payments, which are on the rise worldwide and in the United States. With four out of five Americans using digital payments in some fashion in 2021, it’s becoming increasingly vital for your business to maximize its capacity to accept these.
Users can make digital payments or exchange money virtually via a digital wallet or mobile wallet apps. If you didn’t know there was a distinction between the two, you’re not alone! Digital and mobile wallets share many of the same characteristics and functionalities but with some notable differences.
What Is a Digital Wallet?
A digital wallet is a general term for software that allows users to store payment information such as debit and credit cards or other necessary documentation like airplane boarding passes. The digital wallet saves this information for future reference. Types of digital wallets include the familiar Apple Wallet, which comes pre-downloaded onto iPhones and holds everything from payment information to event tickets for easy access.
A digital wallet also encompasses software like PayPal and Venmo, which either have online payment capabilities or can transfer funds between two users. Some digital wallet services have also begun offering proprietary credit card options. Another valuable characteristic of digital wallets is that users can view them on mobile, desktop, or tablet. Additionally, while people can use them to make online purchases, they don’t allow in-person purchases like a traditional credit or debit card.
What Is a Mobile Wallet?
Mobile wallets are very similar to digital wallets and have many of the same capabilities. The primary difference between the two is that mobile wallets allow for contactless, in-person payment at many stores. In contrast, as we previously mentioned, digital wallets are mostly for storage capabilities. Examples of mobile wallets are Apple Pay, Google Pay, and Samsung Pay. With these types of software, users can “tap to pay” using their mobile phones at the payment counter of a store or restaurant.
Using a mobile wallet is simple. Users download the appropriate app, then add their credit or debit card information. Once they’ve done that, they are all set to use their mobile wallet at compatible stores or restaurants. All they have to do is hover their phone over the near-field communication payment terminal. Some mobile wallet apps are also available on smartwatches and allow people to pay by putting their watch above the terminal. You’ll know if a payment terminal accepts NFC payments if it displays signage resembling a sideways Wi-Fi symbol.
Benefits of Digital and Mobile Wallets
There are many benefits to digital and mobile wallets, some of which overlap. Here are some notable advantages of digital and mobile wallets.
- Accessibility: With digital wallet apps like Venmo or PayPal, users can log in at any time to view the amount of money they have stored in their accounts. With both mobile and digital wallet apps, they have immediate access to critical information like debit cards, loyalty card data, boarding passes, and event tickets.
- Convenience: Digital wallets save users a lot of time by giving them a platform to make online purchases, send money to friends, and cash checks all from their smartphones. Mobile wallets save them time at the point-of-sale register, since “tap to pay” only takes a second, and the user doesn’t have to spend extra time scavenging for a debit card. Additionally, digital and mobile wallets are incredibly user-friendly, especially since most people carry their smartphones with them at all times.
- Security: Many people worry that using a digital and mobile wallet app is less secure than paying with a physical card. However, these apps have many security measures in place. For instance, most apps require a password, face recognition software, or a fingerprint before allowing a person access to the information inside. Additionally, making payments with a mobile wallet app uses a tokenization process to encrypt payment details, which means users can make payments without worrying about compromising their account details. If a hacker steals data from a mobile wallet transaction, tokenization makes it nearly effortless to correct.
- Space conscious: Making a wallet lighter — or eliminating the need for one at all — means one less thing you will need to remember before leaving the house to run various errands.
- Safety: In the age of the COVID-19 pandemic, many customers may prefer shopping at stores that offer contactless processes, allowing them to avoid touching a potentially germ-covered payment terminal.
The Increasing Importance of Being Digital Wallet-Compatible
Mobile payment options exploded due to the COVID-19 pandemic, and there’s no doubt that now they’re here to stay. Some projections estimate that smartphone users making in-store mobile payments will jump from 36.4% of the population in 2021 to 43.7% in 2025. Additionally, Apple Pay is now functional at nine out of 10 stores that can handle NFC payments. And according to Google, more than 150,000 people in over 40 countries use Google Pay every month. Some millennials claim to use as many as nine mobile wallets. In short, physical wallets and cards are becoming more obsolete by the year.
Creating Digital Wallet-Compatible Cards
Card issuers are responsible for providing cards to your business. They can also manage the card program’s legal, support, and insurance to help make debit card issuance easy for your business. Card issuers can also help your business implement digital wallet-compatible cards. With Hydrogen’s no-code card platform, you can issue physical and virtual debit cards and earn revenue with every swipe. Hydrogen manages the ordering, printing, and shipping so you can get back to your No. 1 priority — serving your customers’ needs!
In addition, Hydrogen helps you create digital wallet-compatible debit cards. We support Apple Pay, Google Pay, and Samsung Pay by default. Your fee includes tokenization, and we’ve made sure it’ll work seamlessly for your business.
Hydrogen Can Help You Create Personalized Debit Cards
Your business can capitalize on the meteoric rise of digital wallet-compatible cards with help from Hydrogen. Stay ahead of the times and create a more pleasurable experience for your customers by allowing digital payment methods at your business. They’ll appreciate the safety, security, and convenience of each transaction they make with you.
Our goal is simple: transform businesses from consumers of financial products into producers, creating a fairer, more affordable, and more transparent ecosystem in the process. To get started, create a free account today.