Digital wallets, also sometimes called e-wallets, are one of those terms used in modern finance that nobody ever seemed to bother explaining. Digital wallets essentially replace or condense traditional information such as banking information, card information, and can even be used alongside mobile payment systems to complete transactions. Modern digital wallets such as Google Pay seamlessly integrate a number of functionalities which is perfect for both customer and business owner convenience.
We will be answering the question what are digital wallets by reviewing how digital wallets work, the differences and similarities between digital wallets and mobile wallets, list some examples of common digital wallets and finally review how businesses can accept digital wallet payments in much the same way they accept credit card and debit card payments.
How Digital Wallets Work
Another way of thinking about digital wallets is that they are basically digital versions of your credit and debit card(s) which can be used as part of an app, used online, or stored on a native hosting platform. The primary caveat here is that many forms of digital wallets are not actually representative of an existing credit or debit card but instead exist as a payment method for a distinct account. Apple Pay, Google Pay, and PayPal are all examples of digital wallets which may require card information on file, but can also store funds for purchasing within their native platform.
In terms of practical use, digital wallets generally work through compatible ATMs, contactless payment POS systems, MST payment systems, etc. It may also be possible to complete transactions through an app on your mobile device.
Digital Wallets vs. Mobile Wallets
As we mentioned in the introduction, most people are familiar with the term “digital wallet” and are familiar with what digital wallets do, but many have simply not yet put the term to the definition. This is also true of mobile wallets, which is an extremely similar, but not entirely synonymous term.
Digital wallets can be considered any digital version of a debit or credit card. This may include online resources like PayPal which stores individual information and may or may not include app integration or mobile payment processing.
Mobile wallets are a subset of digital wallets, or perhaps more accurately a part of a digital wallet that is fully integrated with mobile devices such as smartphones. Mobile wallets allow users to make payments on mobile payment terminals or point of sale (POS) terminals.
Examples of Digital Wallets
Venmo is an app-based digital wallet and mobile wallet system which is designed to make loaning, sending, or receiving money quick and easy. It is also a great example of a fully-fledged digital wallet with the capability to link bank accounts or payment cards, make purchases, and transfer funds.
Another service with mobile payment and digital wallet capabilities, Apple Pay boasts convenient integration with Apple devices including iPhones, Apple Watches, and more. Apple also has its own credit card known as Apple Card, which works as an extension of the Apple Pay program.
Google Pay is a digital wallet that’s main convenience is the ubiquitous nature of Google. Many users with Android phones or who use Gmail and other Google software in their daily lives find Google Pay to be an easy way to make payments from a central source. Google works well with almost all digital platforms, which makes Google Pay extremely convenient for users.
How Businesses Accept Digital Wallet Payments
Many modern credit card machines are able to accept digital wallet payments. The majority use contactless payment methods to accept payments from mobile wallets including Apple Pay, Samsung Pay, Google Wallet, and more. Digital wallet payments can be encrypted just like EMV transactions for the highest level of security on the front and back ends of a digital transaction. Accepting digital wallet payments settle in a very similar manner to typical credit card payments.
The key to ensuring that your business is well equipped to handle mobile wallet payments is by working with a reputable merchant service provider. A representative should be able to walk you through the process of what hardware and software your business needs to easily handle all forms of modern payments. Failure to accept these types of payments could result in the loss of business over time.
True Merchant Helps Businesses Accept Digital Wallet Payments
True Merchant is a Better Business Bureau accredited merchant services company that focuses on helping small businesses. We understand that the details of processing electronic payments including digital wallet payments can be a weight on business owners’ minds. That is why we offer transparent, fair pricing models for our top-notch services including CardSecure, NFC payments, online payment solutions, and much more!
To learn more about how True Merchant can help your small business, please contact us today by calling or filling out an online form. One of our qualified merchant services professionals will be happy to get you started.