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How Are E-Wallets Changing the Way Consumers Interact with Businesses?

As an entrepreneur, it’s your job to keep your finger on the pulse of the industry. By doing that, you can spot the trends before they happen and jump on the bandwagon if necessary. Alternatively, savvy business owners will analyse the pros and cons and decide whether they are favourable in the long term or not.

If you run a business, you will know about e-wallets. PayPal is by far the most famous as it has millions of users worldwide, yet it isn’t the only digital payment wallet to exist. E-wallets are shooting up like wildflowers because they provide consumers with benefits that they never had before. As a result, they are dramatically altering the way customers interact with companies.

To take advantage of this, you must understand why and how to implement the tool into your business plan and take your brand to the next level.

What Is an E-Wallet?  

Although you know a few examples of e-wallets, you might not understand how they work. In essence, it’s a piece of software that stores information such as credit card details and passwords, for different types of transactions and websites. They are different from mobile payments, but they are often used in combination to allow for a variety of extra activities, like paying for items through mobile devices.

Thanks to this, transactions are much simpler and easier than ever since shoppers can point their smartphones, tablets, or watches at a point-of-sale (PoS) machine and pay securely. They don’t have to worry about anything as the e-wallet takes care of all the heavy lifting.

What Does This Mean for Businesses?  

The impacts of e-wallets shouldn’t be understated as they are very powerful. In the short time that they have been used in the traditional commerce and eCommerce sectors, they have ushered in new features that modern companies must consider if they want to engage their bases.

Cashless Society  

You’ll hear the term a lot, yet you might not have heard the statistics to back it up. To put the idea of a cashless society into perspective, you only need to go as far back as 2009, when 58% of payments were made in cash. A decade later, in 2019, the figure dropped as low as 23%, which is less than one-quarter of all transactions.

This has led some experts to estimate that cash could disappear from the UK economy entirely by 2026. Whether it’s good or bad for businesses, the fact is that consumers want the ability to pay remotely most of the time. It’s uplifting that several payment methods are available as it empowers shoppers to make purchases their way, rather than having to do what brands dictate. A side effect of this is that customers are now more entitled than ever, with 90% of people using customer service as a barometer for doing business with a company.

Therefore, lots of people will bounce to a rival if they don’t receive the service they expect from your organisation. Considering that market saturation is at an all-time high due to the rise of the internet, it’s not hard for them to find a vendor that uses e-wallets.

The Convenience  

It’s not only the fact that another firm will provide the service that your customers desire. It’s also that e-wallets have changed the game to the point where shoppers prefer not to live without the convenience. They are popular because they are convenient, and businesses can use this property to propel their sales.

PayPal is one of the leaders of e-wallet software, and one of the most successful brands on the planet because it ensures that its users can make regular transactions without making regular account withdrawals. Plus, it’s available in app form and compliments mobile spending, hence why it recorded more than 15 billion transactions in 2020. Online auction sites have benefited the most from this technology because e-wallets have allowed them to take something physical and make it digital. For example, eBay and Amazon have official e-wallet partners, with the former being valued in the hundreds of billions.

However, PayPal isn’t the only remote wallet to launch and make an impact on industries. Neteller and Skrill, for instance, are synonymous with the online casino industry and have helped to make it one of the most profitable markets in business right now. Neteller, in particular, was once the only name in gambling, whereas now the variety of casino deposit methods is eclectic and comprehensive since bettors can also opt for the other wallets mentioned, as well as traditional debit and credit card transactions and cryptocurrencies. For entrepreneurs, these examples showcase how an e-wallet has the potential to make or break your success. That’s how effective they are currently.

Source: Pexels

Layers of Protection  

There’s no getting away from the fact that consumers are still hesitant about being caught out online. For businesses, this is problematic since you need them to trust your site to encourage sales. Otherwise, they’ll talk themselves out of purchases, which impacts your bottom line.

Even though there have been improvements in internet security, such as the switch from HTTP to HTTPS, this isn’t enough for some shoppers. It should be no surprise that consumers want to add extra layers of protection to eCommerce, and e-wallets let them do this because merchants are screened and resources are often split into separate accounts. This is without mentioning that sites and apps are usually encrypted, making it almost impossible to defraud e-wallet users.

That goes some way to explaining why the number of wallet users grew by 140 million in 2019 alone, and why the trend isn’t expected to stop anytime soon.

If you don’t take these features on board, you could lose out to your competitors as it’s inevitable that they will see the advantages of e-wallets. By taking payment methods seriously, you could end up like eBay, Amazon, or online casinos and rapidly increase profits.

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