Digital wallets have become an important tool for the ecommerce sector and they also provide opportunities for financial institutions to improve and deepen their customer relationships.
According to a study conducted by Mahindra Comviva and Aite Group the online commerce market growth is dependent on mobile retail commerce. The whitepaper predicts that the global online commerce market will grow to USD 7,114 Billion by 2020, and mobile retail commerce will be an important part of it.
Mobile wallets will follow two separate paths—general-purpose wallets which will use NFC for connectivity, and the proprietary, retailer-based wallets which use a variety of technologies, including optical/QR code and BLE beacons.
Digital wallets provide a convenient way for merchants to interact and transact with their customers, both online and offline. The reduced friction in the checkout process might determine better conversion rates for merchants, helping them to increase sales. Furthermore, the digital wallet may generate an unparalleled amount of customer transactional data. This helps service providers and merchants harness information to engage the customer with a better experience for each stop on the path to purchase.
Digital wallets also provide value to retail financial institutions by increasing the connection between the customer and financial institution, resulting in increased transaction volume for their payment cards and ensuring higher customer retention.