Over the past few years, the popularity of digital wallets has increased dramatically. This phenomenon can be explained by their convenience and ease of use, and their security â€” an ideal tool for making everyday transactions.
Digital transformation has knocked on the door of both the public and private sectors. The development and further use of digital wallets have become a change, affecting the comfort of payments for both business owners and their customers. It is impossible to deny that digital technologies have given their users many advantages, and the inhabitants of many countries clearly understand this and have been benefiting from their use for a long time. For example, you can fill in your account or withdraw money when you Sign Up to Yukon Casino and start playing.
Therefore, the question may arise whether digital wallets will replace plastic cards or vice versa. Will wallets continue to become popular, giving preference to traditional payment methods?
How COVID-19 Has Affected Digitalization
The emergence of digital alternatives to processes familiar to humans is called digitalization, and thanks to the recent pandemic, the transformation to the digital level has gained a large scale. Humanity has seen how quickly consumer behaviour can change in response to a situation.
When the threat first appeared, the governments of many countries took certain measures to protect their citizens, which stimulated various kinds of restrictions, for example, the use of cash. The war on cash began even before the pandemic. But it was the fear of contracting the virus when withdrawing money from an ATM that made it possible to end this war faster, with digitalization winning.
Shoppers' fears of catching the virus while checking out or in any interaction in the store have forced the rush to turn to digital solutions. For enterprises that have been on the market for a long time, the introduction of digital technologies is no longer new, but the trend of using digital wallets continues to grow among them.
In the aftermath of the crisis, due to a sharp change in the way consumers pay, contactless payments have become incredibly popular. According to Visa data, it can be seen that 73% of all transactions in the world for the year were carried out contactless.
There are already quite a lot of technologies that can become a replacement for plastic cards. Although options such as QR codes, NFC, and temporary PIN codes have been around for a long time, they only became widespread globally after the pandemic began.
After the survey, it became clear that the digital trend could put an end to cash, including credit cards: the survey showed that 86% of the newly introduced contactless adapters will continue to make payments using digital wallets.
Digital Payments and Their Benefits
In developed or developing countries, many residents have a smartphone today. For example, in the United Arab Emirates, as many as 91% of residents use smartphones. But that doesn't mean that the rest of the world isn't familiar with mobile apps and doesn't use them regularly. Below are the factors that influence the popularity of digital wallets compared to the card or cash payments.
Each person gets in line at the checkout, waiting for the previous customer to pay, counting the exact amount in cash. Since it takes a lot of time, no one wants to go through this more than once. Thanks to digital technologies, this problem is gradually disappearing. With digital wallets, the buyer will reduce the time it takes to pay for themselves and others, the need to carry large amounts of cash around or the hassle of trying to find a credit card.
With the help of digital wallets, it is possible to save costs. This is not an advantage that customers receive but store owners. Those who use the POS system do not use the services of intermediaries, which reduces the cost of paying for services. A simple example is the introduction of touch screens in the field of gastronomy and fast food. This means that customers can place their order, pay directly on the platform using digital wallets, and only interact with the delivery person when they bring the order to the right place. This saves a lot of money and saves on staff and overall store maintenance. Thus, business owners can spend these amounts on developing and improving the business.
As mentioned earlier, digital wallets are a great way to slow down payments. To use a digital wallet, you do not need to dig through your bag in search of a card or cash. Even when paying with a card, the buyer will have to enter a pin code or wait for the cashier to enter the payment amount. And with a digital wallet, the only thing you need is to attach a smartphone to a device with a POS system.
Many businesses are concerned about the security of their transactions due to the rise in cybercrime. Before you become a customer and start using a certain digital wallet, you need to research the possible risks and conditions for storing money and information on the Internet. Leading digital wallets have been designed with advanced security protocols and are well protected and encrypted. Such wallets give their guarantee of protecting the money and personal information of the client.
Reducing the Chances of Theft
Since wallets are highly encrypted, this reduces the chance of theft or robbery. Cash is very easy to steal, but robbing a digital wallet is a task for a professional. Learning and cracking the top-notch security of digital wallets is very difficult. Service providers offer their customers only secure transactions with the guarantee of a security system that repels hackers.
Full Transition to Digital Wallets: Is It Possible?
Despite the technological progress and the big jumps in the popularity of digital technologies, cash still takes a strong position in human life. This method still remains one of the main ones around the world: still, as much as 85% of all payments are made in cash. In many countries, cash accounts for the majority of retail transactions.
The well-known card companies-banks, such as MasterCard, Visa, and others suffer little by little from moving away from banknotes and coins â€” they do not earn money on cash transactions. From them, it is often possible to observe the publication of studies that show how much waste goes into printing cash. In addition, credit cards are also not the cheapest means of payment for merchants and consumers, so all these companies are now actively engaged in the transition to digital wallets.
To use cash, no additional devices are needed, which makes this payment method a little more difficult for the older generation. But the last two years of the pandemic have been able to turn this stereotype over. Now even the older generation enjoys the benefits of digital technologies and has access to digital wallets through smartphones.
Statistics show that in 2015, the maximum income from making mobile payments was 405 billion dollars. This figure is expected to rise to $1.3 trillion by the end of 2022. Judging by this factor, it can be assumed that soon digital payments will become mainstream and replace cash and credit cards, but this will take some time. Technological improvements already under development will come to the rescue here.
The Problem of Acceptance
The problem with the popularity of digital wallets is not that they are not accessible, but their acceptance by people. Since having a smartphone it is very easy to create a digital wallet for yourself, many sellers still limit the payment options â€” by credit cards or cash. So far, a minority of companies and enterprises have transformed their payment systems and accept payments with digital wallets. But in the process, more business owners will upgrade their equipment and train employees to make paying with digital wallets possible.
For those businesses that refuse to keep up with development, it will be difficult, as the buyer will look for simpler payment methods so as not to bother himself â€” digital wallets.
Just realize that in 2020 alone, the total amount of electronic payments that have been processed is $71 billion. As mentioned above, paying for goods using an electronic wallet was popular before, but such high rates were achieved only by the end of 2020. This is because many entrepreneurs have switched to online trading and have enabled customers to make payments remotely.
However, despite the convenience and other benefits of using digital wallets, many people still use cash as a payment method. They will continue to exist for the freedom of choice of the consumer. With cash, the consumer will not be connected to banks or businesses, but more and more companies will switch to new payment methods, and people will need to get used to digital solutions. Today, a person can choose from a variety of digital wallet options. Depending on the goals, type of activity, or activity in use, a person will find exactly the right option for himself and simplify his life by speeding up payments and transfers of payments around the world.