Digital wallets have significantly impacted how people shop, and their popularity has grown significantly in recent years. By revolutionizing how people make payments online, they have become an essential tool for eCommerce stores looking to sell more and make the checkout process smoother. Since digital wallets allow users to store their payment information securely and use it to make purchases online, they eliminate the need to enter payment information for each transaction. This convenience is a major factor in driving sales for online stores, as it reduces the friction of the checkout process and makes it more likely that customers will complete their purchases.
In the past few years, digital wallets have been driven by several factors, including increased smartphone adoption, the growth of m-commerce, and the need for more secure payment methods. According to a report by Allied Market Research, the global digital wallet market size was valued at $1.43 trillion in 2019 and is expected to reach $7.64 trillion by 2027, growing at a CAGR of 24.6% from 2020 to 2027. Furthermore, with the increasing occurrences of data breaches and identity theft, consumers are becoming more concerned about the security of their payment information. Digital wallets use advanced security measures, such as encryption and tokenization, to protect customers’ payment information, making them a more secure payment option than traditional methods.
In this blog post, we will explore the benefits of digital wallets, especially for BigCommerce businesses, and how they can help merchants sell more and provide a better customer experience. But before we get to that, let’s understand digital wallets better.
Table of Contents
What are digital wallets?
Digital wallets, also known as e-wallets, are online accounts that allow users to store their payment information securely and use it to make purchases online. Digital wallets are similar to physical wallets in that they store payment information such as credit card numbers, bank account details, and other payment methods. Still, they are entirely digital and accessible through a mobile device or computer.
Digital wallets can be used for various purposes, including online shopping, bill payments, and money transfers. Popular digital wallet providers include PayPal, Google Pay, Apple Pay, Amazon Pay, CashApp, Stripe, Venmo, etc.
How Digital Wallets Benefit BigCommerce Stores?
Your online store is your business’s face; therefore, the more user-friendly it is, the higher your chances of success. Since your target market can access your store from anywhere (including different types of devices and preferred payment methods), it is crucial that you ensure that the order completion process is seamless and convenient for them, irrespective of your storefront – BigCommerce or Shopify.
Faster checkout process
Digital wallets allow customers to store their payment information securely, which means they can make purchases more quickly and easily. This is particularly beneficial for digital stores, as it reduces the friction of the checkout process and makes customers more likely to complete their purchases. According to a study by Statista, checkout friction can result in up to 30% of abandoned shopping carts, so anything that reduces friction is a positive development for eStores.
Increased conversion rates
A faster checkout process leads to increased conversion rates, as customers are more likely to complete their purchases if the process is quick and easy. Digital wallets can also help reduce cart abandonment rates, as customers don’t have to enter their payment details each time they purchase. According to a survey by PayPal, 60% of consumers said they would be more likely to purchase from an online store that accepts digital wallets.
Digital wallets are highly secure, using encryption and tokenization to protect customers’ payment information. This enhanced security can give customers peace of mind when making online purchases, which can be a significant factor in buying from a particular online store. With digital wallets, payment information is stored securely and encrypted, reducing the risk of data breaches and fraud. In addition, many digital wallets use two-factor authentication, biometric authentication, or other security measures to ensure that only authorized users can access their payment information.
By offering digital wallets as a payment option, digital stores can demonstrate that they take security seriously and provide customers with a more secure payment option.
Improved customer experience
Digital wallets provide a more convenient and streamlined checkout experience for customers, which can lead to higher levels of customer satisfaction. E-commerce stores can improve the overall customer experience and build stronger customer relationships by offering digital wallets as a payment option.
How do Digital Wallets Benefit Business Owners?
The benefits of digital wallets extend beyond just the customers, and here’s how:
Reduced Fraud Risk
Digital wallets are highly secure, which can help to reduce the risk of fraud for eCommerce businesses. Digital wallets use advanced security measures such as encryption and tokenization to protect customers’ payment information, making it more difficult for fraudsters to access and use the information.
Lower Transaction Fees
Digital wallets typically have lower transaction fees than traditional payment methods such as credit cards. This can benefit digital stores, as it can help reduce the overall cost of processing payments.
Improved Cash Flow
Digital wallets offer faster payment processing times, which can help improve online business cash flow. Traditional payment methods can take several days to process and clear payments, creating business cash flow problems. With digital wallets, payments are processed almost instantly, which can help to improve cash flow and reduce the risk of late payments.
Increased Customer Loyalty
Offering digital wallets as a payment option can help to improve customer loyalty and retention. By providing a more convenient and streamlined checkout experience, eStores can build a quick and functional checkout process. Now to personalize this experience, you can get expert help. For example, suppose you have an online store on BigCommerce and want to let your customers have a smooth and unique checkout experience. In that case, you can hire a BigCommerce development company like CodeClouds. They offer various services for BigCommerce, including theme development, and more importantly, they have years of experience in integrating digital wallets and other payment-related services. They are the perfect choice for popular wallets like Apple Pay, Venmo, Amazon Pay, and Stripe.
Digital wallets offer numerous benefits to online store merchants. From faster transactions to lower transaction fees, increased security, improved customer experience, and increased sales, digital wallets provide a valuable payment solution for online store merchants. As the popularity of digital wallets continues to grow, online store merchants who do not offer this payment option may risk falling behind their competitors. By embracing digital wallets, online store merchants can provide a more convenient and secure payment option for their customers while benefiting from the many advantages digital wallets offer.