The pandemic has contributed to a big year for digital wallets: millions of people use mobile payments every day, and demand for mobile payments is unprecedented, as flexibility, agility, and speed are top priorities for merchants everywhere.
And new research estimates that 4.4 billion people will use digital wallets by 2025 as customer demand for secure and simple financial transactions is now fueling the growth of this next-generation payment technology.
Though Gen Z and Millennials are using the most mobile wallets – as many as nine at a time, it’s not just the younger generations that use them now. 45% of baby boomers in a recent survey agreed that mobile wallets make payments easier.
But will these new consumer trends stick in a post-pandemic world despite digital wallet payments making online shopping easier?
Mobile users’ growth vs shopping cart abandonment
Mobile commerce is rapidly taking over the eCommerce world. With a growth rate of almost 65% in just five years, it now holds 70% of all eCommerce sales.
Despite its popularity, shopping cart abandonment is still much higher on mobile websites than on desktop at over 85%. This is a big problem for everyone, especially new retailers and companies. And what makes this happen?
The majority of mobile-friendly websites are poorly designed due to the number of devices, screen sizes, browsers, and operating systems that need to be considered when designing a decent mobile website.
The advantages of digital wallets for eCommerce
Inbuilt security and simplicity are the most appealing things about digital wallets. Transactions made with a digital wallet don’t reveal the buyer’s personal information. Each transaction has a unique number, so no one can get the user’s credit card information – it’s not even stored on the user’s phone.
Here are the main advantages of enabling digital wallet payments for your eCommerce business:
Fast checkout for your customers
Most eCommerce platforms allow one-click purchases, so as long as the app accepts digital wallets, they don’t need to fill out any forms and enter card details on small screens. As 35% of online customers don’t want to create an account to make a purchase, digital wallets are a good compromise.
They triple conversion rates
According to BigCommerce, conversion rates tripled when stores offered digital wallets as payment options. Over the years, we’ve been conditioned to think that entering card details on a smartphone is riskier than on a desktop computer. By allowing users to use Apple Pay, Amazon Pay, or Google Wallet, you eliminate that fear and increase revenue.
They are secure
As they use multiple layers of encryption, digital wallets are more secure than credit cards because they store payment information in a specialised, secure environment. A tokenised number is sent to the merchant instead of the real credit card number when a customer makes a purchase. Customers are concerned about the security of their credit cards, so offering multiple payment options will benefit you.
Improved customer experience
In addition to the convenience of not having to take out credit cards from wallets and fill in details online, through digital wallets, customers can also acquire and redeem loyalty points during online checkout. To stay competitive and to stay relevant, many online stores have to invest in technology to facilitate a great user experience and satisfy consumers’ expectations of convenience, choice, and security.
Use a payment gateway to enable digital wallet payments
For eCommerce businesses to operate and accept payments, payment gateways are essential. Digital wallets, on the other hand, are payment methods. For your SME to enable this type of payment, the best approach is to partner with a payment provider who will make it as easy as possible to cater to the changing needs of your online customers.
Learn more about how we can help your eCommerce business enable digital wallet payments today.