What You Should Know When Exploring eWallet Payment Solutions
Globally, digital wallet payment method adoption is projected to exceed 1.3 billion consumers by 2021, with Asia Pacific and some European markets leading the way. (Fintech News) Smartphones are now a primary way for consumers to shop online the world over, driving a surge in mobile payments technology adoption. This has businesses large and small eyeing ewallet payment acceptance as a way to grow sales and decrease cart abandonment. If you’re thinking about adding ewallets to your checkout experience, here’s what you need to know.
What Are eWallets?
Ewallets are a digital payment method on a phone or device. They enable more convenient purchases online, and many also enable fast and easy NFC purchases at brick and mortar locations.
Most ewallets allow shoppers to securely store credit and debit card payment info on a smartphone or other mobile device. Other ewallets, especially ones that are popular in markets with low credit card adoption, allow users to ‘top-up’ their wallets with cash, typically through a bank transfer.
Most smartphones have an ewallet included with their operating systems (think Samsung Pay and Google Pay). It is also easy for consumers to install third-party ewallets. Popular super apps like WeChat and Grab include their own ewallet functionality.
What Are The Most Well-Known eWallets?
The number of eWallets has proliferated in recent years. While many consumers and merchants are familiar with PayPal, Apple Pay and Google Pay, globally there are many established offerings that are capturing large chunks of the market both regionally and on a global scale.
- WeChat Pay: China’s popular messaging app allows users to make purchases, by topping up the app’s ewallet using a bank account, or credit or debit card.
- Ali Pay: Chinese consumers can top up this app with cards or by bank transfer. It reportedly has one billion users.
- Grab Pay: What began as a way for the super app Grab to accept payments in Singapore from passengers for its ride-hailing services has now expanded into a payment method accepted by the likes of Starbucks and Singapore Airlines.
What Are The Pros And Cons Of the Wallet Payment Method?
Pros for Merchants
- eWallets Reduce Friction for Shoppers: For merchants, accepting ewallet payments may reduce cart abandonment. eWallets provide a faster and simpler shopping experience for consumers. Complex shopping experiences drive customers away. When customers have to take too many steps before they can complete a purchase, sitewide cart conversion rates suffer. Almost 70 percent of online shopping carts are abandoned, according to a recent reliable estimate (Baymard Institute), but adding ewallets can improve conversion rates by 3X. (BigCommerce)
- eWallets Are Contactless: As well as being a convenient online payment method, many ewallets add value and peace-of-mind in store. Digital wallets and near-field communication technology (NFC) allow consumers to quickly check out without touching payment terminals or handing cash to another person. This provides a significant value in the post-pandemic era when 60% of consumers plan on using digital/touchless payments instead of cash/coins in the future because of COVID-19.
- Better Security for Merchants and Consumers: Another key benefit of ewallets, especially those with high brand name recognition, is that shoppers already trust them. eWallet access is linked to the shopper’s device, which can be secured with facial IDs, thumbprints and security codes. This leads to more trust from consumers and a lower risk of fraud for merchants.
Cons for Merchants
- You Need to Accept the Right eWallets in Each Market: There are dozens of popular ewallets globally. To be successful merchants need to accept the right ones, such as:
- AliPay (China, Malaysia, APAC region)
- Samsung Pay (South Korea and globally)
- WeChat Pay (China, Singapore, APAC region)
- Google Pay (Global)
- Paytm (India)
- Grab Pay (Indonesia, Singapore, Malaysia)
- Kakao Pay (South Korea)
- OVO Pay (Indonesia)
- Mpesa (Kenya)
- Rappi (Columbia, LATAM)
- Merchants May Need to Manage Multiple Payment Integrations: Integrating with multiple different ewallets can be time-consuming, costly and complex, which is why merchants should use an all-in-one solution to accept ewallets.
For Global Merchants, Offering A Wallet Payment Method Is Critical
According to a recent study, 54 percent of consumers are concerned about handling paper money and coins as a result of COVID and 60 percent plan on using digital and contactless payments instead of cash and coins in the future. Businesses that were still accepting payments on-premises reported a 27 percent rise in contactless payments made with smartphones and contactless cards (Electronic Transactions Association). While physical cards still have a role to play in driving contactless payments uptake, ewallets may also shape the flight to broader adoption of mobile payments.
“Baymard Institute.” https://baymard.com/lists/cart-abandonment-rate.
BigCommerce. How to Use Digital Wallets and Mobile Site Optimization Tactics to Stamp Out Cart Abandonment. bigcommerce.com, https://www.bigcommerce.com/blog/mobile-checkout-optimization/#put-an-end-to-cart-abandonment.
“Electronic Transactions Association.” https://www.electran.org/publication/transactiontrends/new-eta-report-the-state-of-mobile-payments-in-2019/.
Fintech News. The number of mobile wallet users grows by 140 million per year. 2019. www.fintechnews.org, https://www.fintechnews.org/the-number-of-mobile-wallet-users-grows-by-140-million-per-year/.
“Merchant Maverick.” https://www.merchantmaverick.com/digital-wallets-vs-mobile-wallets/.
“Statista.” Statista, https://www.statista.com/statistics/330695/number-of-smartphone-users-worldwide/.