What are digital wallets and their benefits to businesses?

What is a digital wallet?

A digital wallet is exactly what it sounds like: a digital app that makes it easy to store and use your various payment methods. Rather than holding physical cards like a physical wallet, a digital wallet stores information.

A digital wallet can hold any type of account information: credit cards, debit cards, gift cards, loyalty cards, bank accounts, insurance information, concert tickets, and more. In addition to storing this information, a digital wallet makes it easy to use those accounts to pay with just a tap of an app, perfect for small business transactions.

To help protect users, the app encrypts the account data to keep information secure during the transaction while using tokens to create a one-time number for each payment instead of using the account number.

Digital wallets also make it easy to pay online by tapping the app at checkout instead of entering a card. Shoppers can also use their digital wallet to pay for products in store using tap-to-pay or QR code scans.

Why is it important to accept diversified payment methods?

Accepting diversified payment methods can help you increase sales and build loyalty by making it easier for customers to buy. Many people have strong preferences for which payment methods they want to use. If you can’t accept their preferred payment method, they may decide to shop somewhere else.

With a collaborator like PayPal, you get the all-in-one payment-processing solutions you need to drive more sales and conversions by being able to accept types of payments online and in store, including:

• Credit cards
• Debit cards
• PayPal Wallet
• PayPal Pay in 3¹
• Apple Pay
• Google Pay^TM
• QR codes

By making it easy for customers to pay how they want to pay using their preferred payment method, you can give customers one more reason to keep coming back.

The benefits and ease of accepting digital wallets

Offering checkout options like digital wallets provide several benefits for both merchants and shoppers, including:

• Greater speed and convenience. Digital wallets let people pay with a tap, which can reduce online cart abandonment and speed up checkout lines.
• Increased security. Digital wallets require authentication, such as a PIN, fingerprint, network tokenization or face scan. This can protect customers from having their payment methods stolen while also protecting merchants against fraud.
• Better positioned for the future. Digital wallets are becoming the payment method of choice for digital-native consumers who always have their phones close at hand. By accepting digital wallets, you can cater to millennial and Gen Z shoppers, who hold significant purchasing power.

How do you accept digital wallet payments?

Brick-and-mortar businesses can accept more contactless payment options by using a point-of-sale (POS) device that is enabled to accept digital wallets. Shoppers can then use their smartphone, smartwatch, or other NFC-enabled devices to select their preferred payment method from their digital wallet, and then hold the device close to the NFC-enabled (Near field communication) POS reader to complete the transaction.

To accept digital payments for ecommerce, all you have to do is enable your site to accept digital wallet payments. Because customers have saved their payment information in the digital wallet, this helps you simplify the online checkout process by making it easy for them to pay with their card of choice without having to handle the card itself.

With PayPal, you can accept contactless payments like digital wallets, too. PayPal's payment terminal integrates with your entire checkout process, both online to easily accept popular digital wallets, in addition to other popular contactless payment methods like QR codes.

How to accept Apple Pay and Google Pay with PayPal

Apple Pay and Google Pay are popular payment methods used for fast and secure checkouts in millions of places online and in stores.

If you use PayPal as your payment processor, you can accept Apple Pay and Google Pay for your online store using the Apple Pay and Google Pay integration guides. If you also want to accept Apple Pay or Google Pay in store, here's what you need to do:

• Get an NFC-enabled Zettle by PayPal card reader that accepts contactless payments.
• Place the card terminal in your checkout area where it will be easy for customers to access.
• When a customer is ready to pay with Apple Pay, have them hold their iPhone® or Apple Watch® near the card reader until four green lights appear, and the device dings. Once you see the checkmark on your screen, you'll know the transaction is complete.