Money has always been a big concern of ours, especially during the past few years. In the past, the only methods of payment were cash, gold, silver, or trading one thing of value for another.
Nowadays, with the rapid advancement of technology, we have many more ways of paying for our goods and services. For example, many of us rely on our credit and debit cards whenever we go to the shops.
What if we said that our credit cards were a type of digital wallet? What is a digital wallet exactly? Why are they becoming so widely used? Let’s find out what digital wallets are and why their usage is growing in popularity.
What is a Digital Wallet?
For those who don’t know, a digital wallet is a system where we store payment credentials. Credit and debit cards count as digital wallets.
We can use a digital wallet to buy things online and in shops that accept them. That means we won’t even have to use a physical card!
We can also use a digital wallet based on what type of mobile phone we’ve chosen. For example, Apple devices only use Apple Pay. PayPal is an exception to this rule because the app is available on both the Apple App Store and Google Play.
We have three different types of digital wallets: closed wallets, semi-closed wallets, and open wallets. Closed wallet users are allowed to use stored funds for making transactions with the wallet’s issuer only. Semi-closed wallets let users make transactions at listed merchants and locations.
Open wallets can be used for every semi-closed wallet transaction and withdrawals or funds from banks and ATMs.
Benefits of Digital Wallets– Gaming, Casino and More
With the rapid acceleration of technology, digital wallets are becoming more common in iGaming scenes and more. From the fastest withdrawal casinos will allow to cryptocurrencies, many people have welcomed digital wallets with open arms. What else are these wallets good for?
For starters, digital wallets securely store our payment information in a compact form. This gets rid of the need for physical wallets, which we won’t need for playing online casino games. We also won’t need physical banks and companies to maintain a bank account thanks to these wallets.
Digital wallets connect people and businesses set in rural areas, which is great for those living there who want to access an online casino.
Not only that, but those living in developing countries can increase their participation in the global market and iGaming. That’s because digital wallets let users transfer funds to those in different nations, which makes online casino deposits and withdrawals much easier.
Digital wallets must make transactions and keep cryptocurrency balances. Like digital wallets, more online casinos are accepting cryptocurrency as a payment method because of its growing popularity and usage.
However, digital wallets aren’t perfect. For starters, companies benefit from digital wallets because the wallets make it easier to collect consumer data. This leads to the loss of privacy among users.
There’s also the concern about safety. Many consider digital wallets safe because of their built-in security feature called “tokenisation”. Tokenisation works by generating a one-time use token made of random numbers.
Plus, accessing our digital wallets will need other layers of security, like a PIN number or biometric information (fingerprint or facial recognition). When it comes to new technology, though, we always approach it with caution.
However, our biggest concern is that digital wallets can cause more spending compared to cash. This can be detrimental if we’re at an online casino. That’s why it’s crucial to spend our money responsibly.
Are Cashless Payments the Future?
With the rapid advancement of technology, we’re relying more on our credit and debit cards. Soon, we might be relying on our digital wallets.
In 2021, FIS claimed that Denmark, Norway, and Sweden are expected to be nearly cashless within the next five years. Countries in the Middle East and Africa, however, still rely on cash as a payment method. Still, it’s clear that digital wallets are becoming our future payment methods.
In 2020, digital wallets had a 25.7% point of sale (POS) spending, which is a huge increase from the 21.5% POS spending in 2019. Cash, meanwhile, fell from a POS spending of 30.2% in 2019 to 20.5% POS spending in 2020.
Digital wallets are also dominating e-commerce, accounting for 44.5% of spending. FIS expects this to grow to 51.7% by 2024. Most of the e-commerce spending came from the United States, which spent 1.1 trillion USD in 2020.
However, the US is still behind most European countries when it comes to using digital wallets and contactless payment, and its most used payment method is still the credit card.
Cashing Out
While money will always be a big concern of ours, digital wallets have many benefits we can appreciate. These benefits are why they’re becoming so widely used.
