Digital wallets remain a loosely defined concept which means different things to different people. However, with digital wallets emerging as the next focal point and major opportunity, or threat, for payment providers, gaining a clear understanding of what digital wallets are and how they operate remains critical. This brief looks at the different forms and functions of digital wallets today.
Cut through the market hype by using Verdict Financial's clear definitions of what digital wallets are.
Plan your strategy effectively by understanding the potential, and pitfalls, of digital wallets through Verdict Financial's objective insights.
Forecast future revenue potential through Verdict Financial's analysis of the mechanics of how digitial wallets work.
What are digital wallets? Are they the same as virtual currencies?
Are digital wallets a mobile phenomenon? How do online digital wallets work?
Why aren't digital wallets taking off in my market? Don't they work the same everywhere?
How can I get users to use digital wallets? Are there features in a wallet that will drive consumer use?
Digital wallets allow users to complete electronic transactions securely using stored authentication identifiers. This does not necessarily include payments and can comprise other functions and services. Digital wallets are already in use through brands such as PayPal but are set to evolve rapidly in the near term.
A customer-facing payments platform, digital wallets have different drivers in different markets. In emerging markets payments are a sufficient function and can achieve huge success, like M-Pesa in Kenya. In established markets value-added services remain critical to gaining use among consumers who already hold a number of payment options.
The digital wallet market can be subdivided into online wallets designed for remote payment capabilities typically made over the air or online, while mobile wallets are designed primarily for proximity real-world locations and POS uses. These categories are now becoming blurred and this will only increase with time.