Digital wallets are a dime a dozen these days, with everything from simple web applications to ecommerce sites, and other online portals integrating a wallet into their midst. While having a wallet of your own, and asking users for their credit card details would have seemed reckless just a few years ago, the proliferation of wallet-as-a-service solutions has brought it well within reach of most developers.
Beyond just enhancing convenience and customer experiences, digital wallets when executed well, represent additional revenue sources for merchants, all the while increasing customer loyalty, and their lifetime values.
In this article, we cover some of the reasons why it makes great sense to integrate a digital wallet in your web app, or store, along with reasons to store credit card details in the said wallet.
1. Increasing Security
Credit card data is often the most sought after target by hackers and cybercriminals, which makes giving out your card details on ecommerce sites a dangerous proposition. However, since most digital wallets use tokenization technology, the card details provided are replaced by a randomly generated number, which is then used for the purpose of the transaction, following which it becomes useless.
Even though cybercrime shows no signs of slowing down, the rise of digital wallets, and their tokenization technology represent a significant win against cybercriminals. As such smaller ecommerce portals, web apps, and related sites can gain the trust of their users, and onboard them to digital wallets, which can then be used for seamless recurring subscriptions, offers, promos, and more.
The use of wallets at ecommerce sites still remains negligible, but given the substantial benefits, and how important payment and checkouts systems have proven to be in terms of conversions, this figure will continue to increase in the coming years. However, it will take a while for consumers to become comfortable with using their credit cards directly when transacting on lesser known sites, or services.
There are, of course, certain risks for merchants that come associated with accepting credit cards, mostly pertaining to stolen cards, fraud, chargebacks, and the likes even among the best unsecured credit cards.
While these do pose considerable risks, they remain quite similar to fake notes and phony coins that result in losses for physical retailers. Such risks are heightened when trading in niches such as marijuana, or gambling, which requires better monitoring thereof, but not for other consumer niches.
2. Lower Cart Abandonment
Cart abandonment is a serious problem among ecommerce sites, with the rate of abandonment reaching as high as 69.99% on average, representing billions in lost sales each year. This is mostly attributed to the flawed checkout pages that often fail to inspire trust among customers, and marketers have since devised a number of strategies to effectively counter this problem, albeit with varying success rates.
One of the biggest reasons behind the abandonment of shopping carts is the unavailability of the customer’s credit card, or payment information on hand. The time involved in finding the relevant information, accessing it, and inputting the same is often enough for customers to get cold feet.
As a rule of thumb, online commerce should aim to make the process of checking out as seamless, and free from friction as possible.
Apart from certain tried and tested measures such as sending email reminders, and text messages among other things, a digital wallet, with the customer’s credit card information is known to yield the best results.
Not only is this a great way to reduce friction during checkout, it can also do wonders when recovering a potential lost sale, by sending customers right to the point where they last left.
3. Recurring Subscriptions
Credit cards enable recurring payments and subscriptions to be authorized with ease, and if you offer a service that requires regular monthly, quarterly, or even annual payment, it is absolutely pertinent to have a digital wallet that allows users to store their credit card information. After all, there are few other mediums that can ensure that a payment request will always be honored, without manual authorization.
Customer’s are unlikely to authorize recurring payments at relatively unknown sites, but with a wallet, where they can track, control, and manage their subscriptions, their reluctance will likely be lower. In this regard, credit cards and digital wallets are a match made in heaven, that stand to add substantial value to both merchants and consumers alike.
Merchants can customize their wallets, and the intake of credit card information to maximize trust among customers. Highlighting aspects such as ‘Cancel Anytime’, ‘Money-Back Guarantee’, or ‘eMail Notifications’ both before and after a payment can help customers get over any doubts and hesitations that stand in the way of a successful subscription.
Recurring subscriptions stand to add substantial value across various industries and niches, and there have been various attempts already, at a subscription based service as an alternative way to finance a car, or even acquire white goods and heavy machinery. This concept is making big strides in the mainstream, and it will be interesting to see how it progresses from here.
4. Better Customer Experience
Storing credit card information on file, or in a wallet stands to fundamentally enhance customer experiences, particularly when it comes to checkouts. All the ‘One-Click Buying’ and other seamless checkout fantasies in ecommerce can only be made possible with the help of credit cards and digital wallets, ultimately leading us towards a convenient, frictionless purchasing experience.
Customer experience in ecommerce is a constantly evolving discipline, with competitors identifying more and more avenues to add value each passing day, and customers getting increasingly impatient. With this, if provided with an opportunity to enhance customer experience, it is absolutely pertinent for merchants to jump on it, and make the most of it.
While there is a lot that goes into solving the customer experience puzzle, payments and checkout remains a great place to get started. Instituting even minor changes are known to leave drastic impacts on conversions, engagement, and even cart abandonment rates, and going full steam ahead with a digital wallet that collects and stores credit card details can further supercharge any ecommerce presence into a sales machine.
As more and more niche ecommerce startups challenge the bigwigs at their own game, the various advantages which players like Amazon and eBay once took for granted are increasingly getting democratized.
This starts with payments, checkouts, and wallets, but is quickly expanding all across the value chain, piercing into the once unsurmountable competitive fortresses of large online marketplaces.
Having a digital wallet, and letting your users save, manage and use their credit card information directly while transacting on your site is quietly turning into a prerequisite for all professionally managed, reliable ecommerce sites.
As a result, beyond your home page, product page, and trust badges, it is essential to integrate a reliable digital wallet that makes the entire process straightforward and frictionless.
Check out our recent card tokenization case study to see how world’s leading banks leverage this feature in their eWallet mobile apps.