“A digital wallet refers to an electronic [typically: mobile] device that allows an individual to make electronic commerce transactions” according to Wikipedia.
There are three popular models for mobile payments:
Direct Mobile Billing
Direct mobile billing does not require a credit card. For example, when a consumer uses PayPal, they can bypass banks and credit card companies. This is widely used all over the world and most popular in Asia. This payment process is secure because the authentication process involves a PIN and password to prevent fraud. It’s convenient because there’s no software required or pre-registration required. It’s easy and fast. And, lastly, it’s proven, since PayPal has been doing this for the past 15 years.
Mobile Web Payments (via WAP)?
Mobile web payments use WAP (wireless application protocol) as the underlying technology. The consumer can complete these transactions via a webpage, or with additional apps downloaded on their mobile device to make a payment, typically using a credit card and usually involves some form of preregistration. Mobile web payments benefit consumers and retailers for “follow-up sales” because the web payment can lead back to an URL that can be bookmarked making it easy to revisit. This process is most familiar with consumers and has been widely used for decades so it’s proven and works.
Contactless NFC (Near Field Communications)?
Used mostly for purchases made in physical stores or transportation services. Consumers use their mobile phone (not all are equipped with this technology). They wave their phone near a reader device to active payment. Most transactions do not require authentication. The payment is deducted from a pre-paid account or charged to a bank account directly. The biggest challenge is lack of supporting infrastructure.
In the next 5 years we expect to see digital wallets find a strong foothold in many market segments, especially direct mobile billing and mobile web payments. Credit cards and cash aren’t going away anytime soon, however the landscape for purchasing your products and services is definitely changing.
It’s important to allow your consumers to purchase when they want and how they want. One of the first steps for success is to make sure you have a mobile optimized website to ensure your consumers have a great user experience when using mobile devices such as smartphones and tablets. You might want to consider allowing consumers access via PayPal to make purchases since some folks don’t have credit cards. Monitor your analytics closely to learn more about what devices are visiting your website. If your mobile website traffic is low, consider doing some usability testing to find out why.
Your Dingley team is dedicated to helping you find new ways to use technology to increase brand awareness and drive sales. Feel free to contact us anytime with comments or ideas.