Instead, of physically carrying your wallet or money in your pocket or purse, you can just have it on your mobile phone. That’s how it works. A virtual wallet stores your bank card information on the mobile device and facilitates transactions from it. If you might have forgotten your wallet, and have taken services or bought some stuff, then it saves you from further embarrassment.
If you own a smartphone and internet connection in it, then you have all world stored in it. Technological evolution has been transforming our world. Mobile wallets are such technological evolution in the finance sector that has made easy transactions and mitigated the need to carry cash.
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How Do Mobile Wallet Functions?
Users can easily access all the information on their bank cards stored on the mobile by entering a pin on the mobile app. The mobile app uses information transfer technology to facilitate interaction with mobile wallet’s ready-to-pay terminals. Besides storing credit or debit cards, mobile phone also stores loyalty cards, coupons, and tickets.
To keep your mobile wallet encashed you have to transfer money to it through a bank account, debit card, credit card, or link it directly. There are both types of mobile wallets, prepaid and post-paid wallets. The prepaid wallet is required to recharge to make payments. In post-paid wallets, they are directly linked with the bank account. Thus, each time the transactions you will make from a mobile wallet, the money will get deducted from the bank account.
Customers usually use mobile wallets for in-store payments, and it offers ease in making payments as compared to cash or physical credit cards. Mobile wallets listed with mobile service providers are accepted by numerous payment stores.
The major mobile wallets are Apple Pay, Samsung Pay, and Google Pay. These wallets are integrated into mobile devices. Users can also download them from the app stores.
These mobile wallets offer numerous benefits to merchants. They facilitate a faster transaction, and hence mitigate the need for customers to stand in a long queue, and wait. Thus, it saves time for customers and provides them with a good experience. Moreover, the usage of mobile wallets reduces errors. Several times, while making cash payments, the cashier may enter the wrong amount. It may create a bad experience for customers by overcharging, and undercharging would cause revenue loss. Digital payments facilitate error-free transactions with integrated systems.
Digital wallets offer high security, they come with built-in authentication and encryption features. Hence, it ensures lesser risk for merchants to make big payments. Around 80% of online shoppers left their cart abandoned, without completing their payments in March 2021. Digital wallets are highly popular among millennials and Gen Z shoppers.
Therefore, the ease of convenience and the fast transaction facilitated by mobile wallets make them highly popular among millennials.