Facebook iconTwitter icon
What is a Digital Wallet?
What is a Digital Wallet?
Time icon15 April 2015, 5:51 am
A digital wallet is an electronic device that enables the user to make e-commerce transactions. However, with the advent of the mobile phone, and the sheer determination of smartphone companies such as Apple, they have become even more personalised. For example, the latest Apple mobile phones with the e-wallet feature come bundled with security features such as fingerprint recognition for login verification and a detailed profile. In consequence, a user can even verify his age at a bar using his or her digital wallet.

The development

Although the digital wallet concept has been in existence for decades, industry leaders have been a bit reluctant to throw their weight behind it, but that’s beginning to change as consumer trends evolve and convenience in making online payments fast becoming a crucial aspect. With the structural, technological foundation already in place, major companies such as Apple, Visa, MasterCard and PayPal have made significant strides towards adapting this new revolutionary feature, with Apple’s Passbook being one of the latest entrants. Some of the main elements contributing to the popularity of the digital wallet include the lower cost of carrying out transactions as there are no intermediaries such as cashiers and point of sale terminals, which increase the overall operating costs. Moreover, the experience of buying something online on your smartphone or tablet makes it an enticing option for potential users.

The future of the digital wallet

With the rise of the mobile phone and digital wallet, it is inevitable that transactions on the integrated platforms are bound to increase as more and more people, especially the young generation ditches its credit and debit cards in favour of tablets and smartphones. This is where mobile phone manufacturers such as Apple gain the upper hand over strictly financial oriented companies such as Visa and this is likely, according to analysts going to be a decisive element for industry players, making it hard for such institutions to dominate the e-wallet sector.