Having extensively researched digital wallets on behalf of players across multiple industries, I thought that today I should share my thoughts on what they are, and more importantly why you should care.
First I thought we’d review one of the dictionary definitions, this one from DCDictionaryCentral.com :
“encryption software which serves to provide the virtual equivalent of a wallet. In it, may be contained digital cash, credit card information, shipping details, and a digital certificate for authentication of the wallet holder. Both merchants and customers benefit from the added security, expedience, and convenience. Also called virtual wallet, or electronic wallet.”
This is a particularly good definition as it reminds us that it is not just the holding of cash, but also the holding of ways to “charge” the customer that are important for this service.
Next I thought we should reflect on a classic definition from Wikipedia :
“A digital wallet (also known as an e-wallet) allows users to make electronic commerce transactions quickly and securely.”
This is a good definition as once again it does not focus on the storage of funds alone.
For us though, the digital wallet is a crucial piece in the great chess game of digital money services currently unfolding in a fascinating way, taking myriads of shapes in each of the markets around the world. Certainly it makes things easier for the consumer and in time it should make things cheaper for merchants. However, of infinitely more value is the fact that a digital wallet can be the key to unlocking whole new ways of engaging with your consumer. Merchants who fail to recognise and leverage this may find themselves suddenly very lonely. Indeed, right now around the world, my analysis shows brands being made and broken, depending on how well the providers have understood what a digital wallet means for their business.
So I’d like to share the way we at Shift Thought define digital wallets:
“A digital wallet is a new way to engage customers based on a customer account that can hold stored value and allows users to make electronic commerce transactions. It is a core functionality employed by merchants to help build closer ties with their customers. Customers can find and use services across a rapidly increasing number of channels, payment instruments and class of trade”.
Through the Shift Thought Digital Money Series of viewports and frameworks, we aim to communicate to players from different industries and parts of the world how their counter- parts and competitors are engaged in leveraging digital wallet technologies. We hope this serves to ignite ideas to take current initiatives to the next level.