Times are changing, technology is rapidly evolving, and consumers continue to adapt the way they pay for goods and services and adopt the latest ways to pay.
For merchants, keeping up with the latest technology is key to keeping customers happy - because remember, convenience is king. If they can’t pay the way they want to, it could result in you losing a sale and that’s the last thing you want to do.
One of the latest trends around are e-wallets, but what are they all about? And what’s the difference between the e-wallets available? Stay tuned to find out. We’ve put together a nifty guide to everything you need to know about this new technology, so you can be sure your business doesn’t fall behind.
E-wallets, also commonly known as digital wallets, are apps that allow consumers to make electronic purchases using their smartphone or online.
The wallet securely stores data like credit card, debit card or bank account information, making them a safe and super convenient way to pay.
With an e-wallet, all a consumer needs is their phone (and let’s face it, who leaves the house without it nowadays?) to complete a transaction in-store, so whether they’ve forgotten their card or weren’t intending to spend money, if you accept payment via e-wallets, there’ll be nothing stopping people from making a purchase.
Face-to-face transactions using e-wallets work in a very similar way to their contactless counterparts. The consumer opens their e-wallet and holds it near the card machine, they verify the transaction using a password or otherwise (this varies from provider to provider), and their smartphone interacts wirelessly with the machine.
The technology used is called near field communication (NFC) and all modern smartphones will have a chip embedded inside which allows for such transactions.
As we just touched on, there are small variances between the way e-wallets work with different providers, so let’s take a look at the top three available in today’s market.
Apple pay, launched in 2014, is available on all iPhones and Apple Watches. It can be used in-app, online with one-click purchases or contactlessly.
Consumers verify their purchases in one of two ways; using touch ID or face ID. With Apple pay on iPhones, a customer merely has to hold their device within a few centimetres of a compatible card machine and their e-wallet will spring to life without them opening it manually. They then either glance at their phone or hold down their finger to authenticate the transaction.
It’s not just payment cards or accounts that can be added to an Apple Pay wallet either, but gift cards and vouchers too. However, the merchant in question must support this function, and not all do.
iPads and Macs can also use Apple pay with compatible purchases. It works in a similar way, but the consumer will be presented with their billing and shipping addresses to check before proceeding.
Whichever device is used, the buyer will see a tick and/or hear a ping to confirm their purchase has been successful.
Android pay initially started out as Google pay in 2011 but can now be used on any smartphones that aren’t Apple, and the technology and process are largely the same - the consumer enters their card or bank details into the app and pays contactlessly.
The difference comes down to authentication as some Android devices aren’t yet equipped with face recognition or fingerprint technology, so, to verify a purchase with Android pay, the user must enter a passcode.
Android e-wallets also allow gift cards and loyalty programme details to be added in (where compatible).
It’s also possible to pay via a smartwatch using Android pay if Android Wear is installed. In order for this to work, the consumer must have Android pay set up on their smartphone and link it to their watch using a security code.
Since it’s only recently been made available on a number of Samsung smartphone models, Samsung pay isn’t yet as widely accessible as the previous two options.
It uses NFC in the same way as Apple and Android but also adopts Magnetic Secure Transmission (MST) technology. In some of the newest Galaxy models, there’s a magnetic coil built-in which creates a field that’s used to transmit signals to ordinary credit and debit card machines.
Transactions are authenticated using iris scan, intelligence scan, fingerprint or pin number. Some loyalty cards and gift cards can also be added to Samsung pay e-wallets.
So far we’ve been discussing e-wallets used for in-store transactions via a smartphone, but they can also be used online. The similarity is the consumer will enter their card or account details into their wallet and use this to make online transactions instead of manually entering their details every time they want to pay for something.
E-wallets online use ‘tokenization’ to make checking-out more convenient for consumers, and it’s this which allows for ‘one-click’ purchasing and other innovations which reduce the hassle of making a payment.
There are three leading online e-wallets, so let’s take a quick look at how each of them works.
With PayPal, a customer links their debit card, credit card or bank account to their digital wallet and when it comes to paying for something online (assuming the retailer gives the option) all they do is log in to their PayPal account and choose which payment method they want to use.
Amazon Pay lets consumers pay using the methods set up on their Amazon account, on third party sites. So, instead of entering all their details and opening a new account, they simply enter their Amazon log-in details and select which card or account to use. All they need to do is accept the T&Cs of the third-party site to complete the transaction.
With Google Pay, the customer sets up their account, adds their payment methods to the digital wallet and opts to check-out with Google pay (where available) online. It’s similar to the previous two options in that it cuts out the faff of re-entering card details and personal information every time a purchase is made.
Ready to start accepting e-wallet payments? With our payment gateways, pay by link options and contactless card readers you’ll soon be on your way. To chat with one of our expert advisors and see how we can help, get in touch today on 08082 393254.