Small businesses lead the way in accepting contactless, convenient mobile wallet payments from their customers.
If you haven’t started using a mobile wallet yourself, you’ve probably seen someone wave their phone and effortlessly pay for their purchase and exit. Many retailers and restaurants now offer contactless payment systems, with mobile wallets in smartphones quickly gaining usage. In fact, mobile wallet usage is growing swiftly, especially overseas. In the United Kingdom, for example, more than three-quarters of consumers have switched their physical wallets for a mobile option, according to Business Insider.
Also referred to as a digital wallet, a mobile wallet is a virtual wallet that stores payment card information on a mobile device. Generally, it resides on your smartphone and allows virtual processing of everyday purchases as well as the storage of identification, credit, debit, gift, loyalty, and membership cards; coupons; and travel and event tickets.
These digital wallets are replacing the wallets many of us have carried in our back pockets and purses for decades. According to a study cited by Regions and conducted by eMarketer, an estimated 51% of U.S. smartphone owners will use digital wallets by 2025. Accelerated by COVID-19 concerns, mobile wallet usage gives consumers a contactless way to zip through the checkout lane with a simple passcode, face, or fingerprint scan. Also known as “tap to pay,” most transactions can be completed in a few seconds! No more fumbling with your wallet to pull out dirty cash and no risk of leaving your credit behind.
So, just grab my phone and go?
One caution—don’t count on leaving your trusty wallet home just yet. Though large retailers most likely honor Apply Pay, Google Pay and/or Samsung Pay, smaller businesses and restaurants may vary or limit their platforms to only one option. Check on their pay platforms (via their website or a phone call) before you show up with just your phone to avoid surprises. Or keep cash and a credit card handy as backup until more businesses have joined the mobile wallet revolution. According to the 2022 Commerce and Payment Trends Survey from Global Payments, 53% of merchants plan to expand their mobile payment options, so digital shopping opportunities will soon be even more widespread.
What digital payment platforms are available?
The key payment platforms, like Apply Pay, Google Pay, Samsung Pay, and others make payments convenient and easy. All your credit card info is stored in your digital wallet. It’s less cumbersome (you don’t need your wallet, just your phone), and more hygienic and secure. In 2021 alone, the 3 main digital wallet platforms were used by 101.2 million Americans over the age of 14—up from 92.3 million in 2020, according to Regions.
Many Western Union customers around the world also send money directly to the mobile wallets of friends and family members through the Western Union app. Download it on the Apple App Store or get it on Google Play to send funds to Mexico or elsewhere. Follow the easy instructions online or visit one of our approximate 600,000 global agents for support.
Are digital wallets safe?
Digital wallets do not store your actual credit cards on your phone. They use tokenization, which generates a unique code for each purchase rather than sharing a credit or debit card number. This helps prevent actual debit or credit card numbers from being compromised if a merchant is hacked and payment data is revealed. Also, your personal information is not shared with merchants. In fact, digital wallets are considered safer than standard credit cards. As businesses become more confident in going cashless, consumers will see more opportunities to embrace this secure and sanitary way to shop. Juniper Research estimates payments made using digital wallets will exceed $10 trillion by 2025, almost doubling 2020’s $5.5 trillion.
Adapting to a new normal
It’s predicted that by 2025 one in three ecommerce payments will be by digital wallet in the U.S. The Asia-Pacific and Europe regions have embraced digital wallets at a faster pace and their influence has begun to affect other parts of the world. As more people adopt digital wallets, the benefits will change our in-person shopping experience: long shopping lines will disappear, hygiene concerns will wane, bank runs will lessen, transaction security will improve, and shoppers will leave their physical wallets at home.
