Cash On the go- Why customers find digital wallets convenient

Editor | Sep 10, 2020

It’s your anniversary and you forgot to buy your spouse/partner a gift. You do not have the time to go to a store and pick something up cause let’s face it, nobody does these days. What do you do?  You take the magic genie in your pocket- the smartphone- and log on to the latest store everybody is talking about.

You have that perfect gift that says “I love you” and scream “no I didn’t forget our anniversary” in your cart. It’s time to pay up- just a few long set of digits , a CVV number you can never remember, a password that you never had so needs to be “one time” and you are home. If only it were that simple.

Endless waiting for the internet banking page to open, for the banks link to set in, a few failed transactions (some of which get you debited but without a purchase) – sound familiar?

Are these payment hurdles keeping your customers away from Shopping Nirvana on the mobile? Haven’t you heard of a Digital Wallet yet?

The New Fad in Town?

Digital Wallets, also called virtual wallets, are basically virtual accounts/holders of money. The money sits in your mobile phone/ computer and you can use it to buy goods online at your convenience without any hassles of security or passwords.  These wallets can be easily loaded vie mobile payment providers, online banking systems or even through operator services (Airtel Money for example).

Configuring a digital wallet is not difficult. Once the customer does this (and it is a onetime thing), he/she can easily make contactless payments via NFC enabled devices (like the new iPhone6 promises) or via a gateway transaction online.  Digital wallets can be closed (single site access to the wallet) semi closed (a bunch of sister sites can access the wallet) or open (any estore purchase can be made via such a wallet).

Judging by the adoption of this technology by end users, Digital Wallets are still nascent. Yet the potential they have to change the way we shop and the ease they offer the customer has forced many a player to try out options and launch solutions tailored to this need.

So is a digital wallet important?

In the Indian scenario, where people are obsessed perennially with the lowest prices possible for any and everything, it is indeed a challenge for e-commerce stores at actually get a payment done BEFORE the actual delivery of the product.

Like a colleague from work puts it, “what if it turns out to be not what I had in mind?” Apart from easy access and exhaustive inventory this is another challenge etailers in India face-  majority of purchases fall under the category of Cash on Delivery (COD). Now in this scenario to divert the user preference from COD to a digital payment is tough.  In fact, Indian shoppers online find COD a very easy tool to “test” a new site or even a service on a popular ecommerce site.

What is tough is more often than not also what is needed.  Flipkart was one of the first movers in the space in the Indian market with its digital wallet solution PayZippy.  How this worked was simple- the consumer stores credit/debit card details in their Payzippy account and quickly completes this purchase with minimal steps each time.

Snapdeal too came up with Klickpay, very similar in its approach. While Flipkart recently pulled the curtains down on Pyazippy, Klickpay is still struggling with adoption issues.  Then we have a plethora of Indian offerings in this space, especially from companies that started off originally as Payment gateways like Paytm, Oxigen, Mobikwik and QwikCilver Solutions who are now venturing into semi closed digital wallets. PayU is another example that promises prepaid digital wallets very soon.

Then of course there are Telco operators who have ventured into the arena, Airtel with its Airtel Money, Vodafone and even Docomo. How many of these are a success story? None actually, for Indians are still very worried about money being transacted online.

What do you do?

So after all this if you are still questioning the need for a  digital wallet on your e store, the answer is an overwhelming YES. While even today 80 percent of sales are happening on COD model in India, you need to drive customers towards digital payments.

This can only be done by getting the process as simplified and trust worthy for the user as possible.

Now if you have the technical wherewithal and the deep pockets like the Flipkarts of the world, you may invest time energy and money into developing your own wallet solution.  Yet, given that the best out there have yet not cracked that nut, why not go the third party way?

Yes, many traditional payment gateways like PayTM are dying to be your partners for digital wallet solutions. It works out easy for you as well since

  1. These are established payment gateway brands and a digital wallet solution rides on this brand image
  2. You invest nothing and provide your customers with an easy payment method
  3. You ensure that impulse buying, by far the most common reason for money coming to you, gets  to its logical end and you maximize hits to sales conversions

Looking for the best Wallet is easy

It is not that difficult to find the best digital wallet for your store. Here are some basic do’s and don’ts that will help you in the task:

  • Safety is paramount- ensure that the wallet you chose is safe and secure- ensure there are multiple layers of security at every step for example security questions or OTP verification etc. while building the account at the consumer end.   It is better to avoid wallets that require consumers to link their bank accounts with the wallet, since that is not something everyone is open to.
  • Open Wallets are the best- Digital wallets that are open, and do not limit store options are the best and easiest to adapt to. Also, it is important that the wallet is accessible from anywhere, be a laptop or a mobile smart phone or tablet.
  • Payment is not all a wallet should do-  A good wallet should surprise and reward the consumer for using it. Add in airmiles, or hotel points, give them redeemable coupons on each payment via the wallet. Anything that would make them want to use the wallet more is welcome. Finding a partner who would enable this in the wallet would go a long way in promoting consumer adoption.
  • Simplicity of use- one cannot over emphasize this. The biggest need is to make the wallet as easy and simple to create and use as possible.  Sometimes, even if your store per se is not that popular, just having a good wallet to shop from drives consumers in.

What you would have to do in the bargain though is run an active campaign to both educate and entice your customers on using a digital wallet. May be couple discounts on digital payments? Or add in store coins that can be redeemed later? Get whacky with ideas, the idea being to make a digital wallet the indispensable part of shopping nirvana that you promise your customers.


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