A recent study suggests that consumers lack confidence in e-wallets, even though more than 50% of the world population is projected to use them in the next three years. As a result, card payments have experienced an uptick in usage as people’s reliance on cash dwindles. According to the Edelman study, 64% reported trusting banks as opposed to 47% for digital payments providers.
However, this goes against conventional wisdom that says e-wallets are better for customers than credit and debit cards. The reality is that you should give e-wallets more of a chance, and these are the reasons why.
Card Fraud Is Hard to Stop
There’s no need to mention e-wallets to understand their benefits. Why? Because the levels of fraud relating to credit and debit card transactions are off the charts. In the UK in 2020, for instance, a total of £574 million was stolen from people at home and abroad. And that’s not even the worse year in the last decade. The figure has been above £574 million three times between 2015 and 2020. The number could decrease dramatically, yet it would still cost innocent consumers hundreds of millions of pounds annually, counteracting MasterCard’s claims consumers would overcome their reservations.
The same isn’t true of the likes of PayPal and Skrill because e-wallets have enhanced security measures to keep sensitive data private. Firstly, most e-wallet brands use 128-bit data encryption at a minimum, meaning hackers can’t access the data regardless of whether they manage to steal it. Of course, this often makes them likely to target card payments as there is less hassle involved. Secondly, a digital payment operator essentially acts as a proxy by only handling necessary data. This means there is less metadata for thieves to leverage.
Lastly, and most importantly, e-wallet operators have proven that their services are compatible with the latest security measures. Biometric security, such as a thumbprint or facial recognition technology on smartphones and tablets is already in use for PayPal users. To log in to the app, the account holder can decide to use biometrics for privacy reasons.
Reputable Businesses Are Sold on E-Wallets
Another sign that e-wallets aren’t as unreliable as the fintech study highlighted is the number of companies that incorporate them within their business plans. They aren’t small, Mom and Pop retailers, either, or SMBs that will embrace any software to get ahead of their competitors. The brands are among the biggest and most reputable in the world.
The relationship between eBay and PayPal is a prime example. Yes, Amazon has passed eBay, yet the online auction house continues to report staggering numbers. For instance, it has over 1.5 billion active listings on its site, billions of pounds of goods are bought through the site yearly, and the app has 500 million-plus downloads.
Anyone who was on the bandwagon early knows that the security and reliability PayPal offered in eBay’s early years was a building block for success, so much so that Amazon accepts PayPal payments too. Google, on the other hand, has adopted a deeper integration policy than most, allowing its users to pay for services directly in Gmail and YouTube.
Then there’s the online casino sector, an industry that is quick to adopt innovative payment methods to encourage customers to deposit and withdraw money in a safe and easy manner. Nowadays, PayPal casinos are not only available but also equipped with brilliant welcome packages that reward players for wagering money through the platform. Players can choose from a plethora of enticing promotions such as 100% deposit bonuses, free spins, or both. E-wallets are popular to the point that the online gambling industry regularly has three or four digital payment operators available for users.
There’s room for growth in these areas, too. After all, all three lean on the convenient nature of e-wallet technology, particularly regarding mobile devices. So, the fact that e-wallets are integrated into Android and Apple smartphones makes them ideal for mobile payments. Plus, the rise of smartwatches as payment options is sure to help e-wallets because Apple Pay and Google Pay, both of which can be linked to PayPal, will be accessible for users.
People will start to recognise the advantages of e-wallets in the future. For now, the jury is still out among British customers. However, the points in this article show that the benefits are too powerful to ignore.
