So what exactly is a Digital Wallet?

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.

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This entry was posted in Digital Money, Digital Wallet, Global, Mobile Money by Charmaine Oak. Bookmark the permalink.

About Charmaine Oak

Charmaine Oak is the practice lead for Digital Money at Shift Thought. She has over 27 years of experience of creating and delivering solutions to market. Her skills and experience are at the intersection of mobile, banking and payments. She brings a unique perspective, having contributed to significant ventures at leading global companies: Western Union - one of the world’s largest financial brands, France Telecom/Orange – a leading mobile operator, Royal Bank of Scotland – a leading bank, LogicaCMG – the Pioneer in SMS and Wipro – one of the world's largest IT service providers.

3 thoughts on “So what exactly is a Digital Wallet?

  1. I enjoyed reading your post and especially the US ecosystem coverage in the Digital Money SAGE knowledge base. Interesting to see all the new entrants and their partnerships and business models. Thanks for sharing this, it is an incredibly useful and well-researched analysis.

  2. I found this blog and the overall knowledg-base offers an engaging analysis of the digital wallet environment and its opportunities. This definition of digital wallets brought home to me the vast possibilities that are available now and that we may see in the future. From a business perspective, there is substantial value in defining a companies strategies and investments in digital money in general and the digital wallet in particular.

  3. Pingback: Shift Thought | Digital Money | European privacy action–what effect on the Google wallet business model? | Digital Money

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