Digital payments are becoming commonplace. Whether you are shopping online, in-store, or for a mobile service, digital payments make paying for services and products far more manageable. Users benefit when apps simplify this process, including linking integral payment processing apps for ease of use.
Implementing a digital wallet can streamline payment processing. Digital wallets allow users the ability to deposit and transfer money within a dedicated account that remains online. This avoids lengthy ACH transfer times and creates another convenient option for P2P transfers or merchant transactions.
No matter how you interact with payment processing, adding a digital wallet can streamline this sometimes frustrating process. Read on to learn more:
The Rise of Digital Payments
Long gone are the days when cash was the only option when paying for services or products. Increasingly, individuals are moving toward digital payments for everyday transactions.
Statistics suggest that digital payments are projected to reach US$1,269,858 million this year (2021).
In a 2020 survey, JP Morgan reported that “54 percent of consumers agreed that they use digital banking tools more due to the pandemic today than they did last year.” So while this trend might drop off once life returns to normal, online shopping and digital payments will stay on the rise.
With more people bringing their phones everywhere they go and housing a digital wallet on their phones, more businesses are implementing digital payments for ease of use and customer satisfaction.
Payment Processing Overview
Payment processing is the ability of a payee to accept and process the payment from a payer. Payment processing exists in various forms depending on the industry, geographical location, and preferences. For the most part, payment processing abides by social etiquette: how one person expects to pay a business is usually the payment method that the business accepts.
Payment processing, in general, has been a crux of many B2C and B2B relations. Upon completing a service or the successful selling of a product, the client is expected to spend their funds with the merchant, business, or peer.
The more ways a person can pay another, the better the transaction and user experience will be. If a vendor accepts cash, debit, major credit card providers, cryptocurrency, international transfers, rewards points, and dedicated digital dollars, they have an increased chance of sealing the deal.
With more payment method options comes more areas of risk and data vulnerability. A business must be prepared to handle compliance issues associated with each payment platform, including a risk assessment strategy, and they must also be able to cash that payment with their personal funds.
Digital wallets have been on the rise as more fintech platforms have emerged.
Think of PayPal: In this digital wallet, you can connect and pay with bank checking and savings accounts, connected credit cards, and even send money sitting in your PayPal account.
After specific verification steps, this digital wallet gives users free rein to send money to international users, using ACH payments, manage reoccurring payments, collect money and use PayPal as a payment method, and connect your PayPal account to a dedicated account or service.
When making an online purchase, many users opt to use a connected payment processing vendor like PayPal, Stripe, or Square as these services typically keep the user’s information on file and only require a passcode or biometric authentication measure (or none at all).
Therefore, more customers can be on their way sooner. Instead of fumbling around for their wallet to find their card and then manually inputting their card numbers and billing address, often with typos, the third-party software has all this information ready to go, error-free.
This ease creates more long-term revenue for the business. If the option for easy, third-party payments is there, users remember this and go back to these services. They can also set up recurring payments for a more convenient payment method.
Introducing Digital Wallets into Your Payment Acceptance Process
If you’re sold on the idea of digital wallets, then consider implementing one in your business model.
Smart digital payments will have sophisticated 3D Secure for secure transactions. This requires users to make an additional step towards completing their purchase, which is great for high-risk transactions and new customers.
Digital wallets with strong customer authentication (SCA) approved exemptions can grant regular users exemptions so that they don’t have to always go through 3D Secure. Users who regularly visit your website or service will be pleased to know that their payment is trusted while also relieved that their payment data is protected.
If you want to implement digital wallets and the added payment security into your payment process, then the most important first step is going with the right vendor.
There are several different types of digital wallets to choose from, many of which come with simple integrations and many of which your customers already use. Pick one with honest fees, robust security, and multiple security features.
Creating Digital Wallets for Easy Payments
Another option to consider is creating a digital wallet through software-as-a-service. If you are looking for a white-labeled yet secure option for fintech transactions, you can’t rely on a common service like PayPal or Square.
With Sila’s SDK, users can easily convert a reliable stablecoin like USDT into SILAUSD to send secure crypto transactions. Those who operate using the Sila app enter into an agreement made simple: the user provides the payment in crypto upfront, but a stored digital account and the crypto is only transferred when the services are rendered.
This takes the guesswork out of service-based transactions while also taking advantage of the security and decentralized nature of stablecoin. As individuals who want to continue to use crypto and the growing digital currencies it provides, it makes sense to invest in a digital wallet. Additional APIs with ACH transactions capabilities, like ACH debit and ACH credits, a secure FDIC-insured bank account, and compliance-as-a-service capabilities, can also be added to the white label product.
Design a digital wallet that is unique to your business, fully functional, while also white-labeled.