Virtual Spending: Introducing The ‘Digital Wallet’
28 November 2019
It’s no surprise that as modern consumers, we are always on the look-out for more. We want what we like, and we want it as quickly as we can possibly have it. One way that brands are trying to capitalise on this way of thinking is using digital wallets, making the act of buying a product a completely new – and personalised – experience. But what are the real benefits of a ‘virtual’ purse for consumers, as well as the brands themselves.
Why go digital?
As of the end of 2019, digital wallets have proven to be most popular in Asian markets, with over 45% of Chinese buyers preferring to use this method (according to eMarketer) compared with just 20% of Americans. Although this may perhaps be a limited means of purchasing currently in Western retail, it is certainly not without its benefits for any type of customer base. From a consumer perspective, there is an increased levels of financial protection, as there is no need for direct access to a bank account or cards for purchases made. There is a wealth of new ease of usage, as customers could effectively be anywhere in the world – even on the move – enabling them to act on a more impulsive decision to buy something they may have had their eye on for a while. Also, there is the possibility of a greater amount of discounts and loyalty on offer to them, the growth of the digital wallet allowing room for exclusive deals, cash-back or mobile recharge top-ups.
What’s in it for brands?
If this is a direction a brand may be looking to expand into, there are multiple types of wallets an online store can offer. A ‘closed wallet’ presents consumers with buying goods solely from one place, while a ‘semi-closed wallet’ provides purchasing opportunities across multiple vendors, as per approved merchant vendor listing. There looks to be a possible third option of an ‘open wallet’, adding a benefit of withdrawing cash at ATMs, but is currently only authorised by banks themselves. But why should brands offer a digital wallet service in the first place? There is a real source of purchasing power available here, and understanding the importance of this will ensure consumers from other demographics can be drawn to buy from brands they perhaps have not been exposed to before. The ability to personalise and customise the buying experience is also now open to expansion, enabling online stores to introduce promotional campaigns on their apps or websites for free, engaging their consumers in a brand new way. If brands use unique scanning or QR codes in the payment process, the codes themselves provide a clever and subtle way of brands to build a consistent awareness in an already highly competitive marketplace.
Digital banking itself is a lot more facilitating than traditional banking services, giving consumers around-the-clock access to check their funds without the burden of carrying cash or credit card checks. The digital wallet system is creating a type of convenience that is now appealing to a wide breadth of online consumers, regardless of any existing financial concerns – allowing for change in habits, and a growth in an area that is only promising more success for the future.