What Is A Digital Wallet in Canada? Meaning, Top Wallets, and Much More
The trend of remote working amid lockdowns has permanently changed how we shop and pay with zero physical contact. Industry estimates that almost two-thirds of online consumers prefer to purchase products through digital wallets rather than driving one mile to a shopping outlet which can take time.
Also, cash transactions steeply declined due to the spread of COVID-19 virus. Quite naturally, this leads to the massive adoption of digital wallets world-over. However, there’s a more detailed story behind the phenomenal rise of digital wallets.
What is a Digital Wallet?
A digital wallet is an online interface that allows a person or business to conduct electronic transmissions. A Digital wallet is a “mobile wallet” as most users perform online transactions through their smartphones. It also securely stores users’ other payment methods, such as credit cards, driver’s licenses, flight tickets, and coupons.
Digital wallet provides ease of use- It enables users to make purchases from their devices, such as a smartwatch or mobile phone. The best-known digital wallets are- Paytm, Apple pay, Google pay, and Samsung pay.
How does Digital Wallet Work?
The transactions are performed through a series of encrypted processes, which include the following-
- The user enters the digit of their card into a digital wallet like- Google pay or Apple pay.
- The token for the user’s card gets active in the digital wallet. The token is generated by card schemes during the process, and each device has a separate token.
- The cardholder performs transactions and pays them through the digital wallet.
- The payment code is captured when a user moves the device close to the NFC reader, just like a contactless card.
- The seller then shares the transaction with the token, which gets de-tokenized by the card scheme.
- The transaction gets approved and is visible to the cardholder’s balance or transaction history.
The Reason Behind the Large-scale Adoption of Digital Wallets
Industry estimates that by the end of 2022, the number of digital users will reach around 3.6 billion – almost half of the world population. Furthermore, the use of mobile payments doesn’t seem to be slowing down, as the market can touch the graph of $15.69 trillion by 2028.
Mobile wallets provide a secure and easy-to-use online interface. The excessive use of the internet and smartphones have affected consumers’ behavior. There’s a parallel universe inside the rectangles of the smartphone’s screen and people are more comfortable using virtual cards instead of going to the store and using physical plastic cards, which is time-consuming.
Every step of making transactions is encrypted end-to-end. This makes it hard to steal card information until you share it with anyone. Software’s life cloud security and 2-factor authentication make online transactions well-protected for cardholders and merchants.
Consumers today are more inclined towards online purchasing that influences merchants to adopt digital wallets. Every business today in any sector is offering multiple digital wallet options to ensure that no customer should go empty hands. Digital wallets let merchants acquire new merchants and retain existing ones.
Top Three Mobile Payment Options in Canada
1. Google Pay
Google Pay is compatible with most Canadian debit and credit cards. It even allows iOS and Android users to add loyalty cards, gift cards, book event tickets, and boarding pass.
2. Apple Pay
Apply pay is a popular mobile payment option in Canada. The Apple’s advanced face ID feature, makes it hard to perform unauthorized transactions. In Canada, Apple Pay is associated with major financial institutions.
3. PayPal
PayPal is the best of all time and lets you transfer and receive money domestically and internationally with no extra charges. You can use it to deal with any retailer in any corner of the world.
There you have it! We hope you have gained relevant insights about digital wallets and which is best suited for you to make online transactions.
Digital wallets like Google Pay or Samsung pay are best for you if you do routine online transactions. However, if you’re a merchant and deliver your products worldwide, you should go with PayPal.
