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Digital wallets, also known as e-wallets, are software, or electronic device on an online service that helps an individual or business make transactions electronically and store users' payment information for several payment modes on different websites.

Traditionally a digital wallet was carried in the form of a smartphone application. However, it also exists in other forms such as desktops, and online owing to its flexibility and mobility. With features such as storage of payment information, convenience, security, contactless payment, global accessibility, cryptocurrency wallet, integration with loyalty programs, and others, digital wallets have evolved as a necessity for human usage. It stores different digital versions of payment methods securely, including credit and debit cards, gift cards, cryptocurrency, boarding passes, event tickets, coupons, passwords, and others.

Digital wallets employ different technologies such as mobile hardware, mobile applications, near-field communication (NFC), and security methods to create a user-friendly payment experience. It eliminated the need for physical payments and cards providing a secure and convenient way for payments. Digital wallets also streamline the payment process, making transactions faster and reducing the need for manual data entry.

Some of the Top Trends in Digital Wallets Include:

Crypto Wallet:

A crypto wallet is a digital tool that helps users to store send and receive currencies such as Bitcoin, Ethereum, and others securely. It stores private keys that require access and manages the cryptocurrency holdings on the required blockchain. The use of crypto wallets is rising in the market as it assists users in investing and transacting safely.

Smart Voice:

With the evolution of Alexa, Siri, and Cortana, smart voice has entered into digital payments. Amazon was the first company to introduce a smart voice in digital payments. This helped the users to make purchases and send or receive money more efficiently. These are mostly used for making small payments including paying bills, purchasing groceries, and paying for public transportation.

Biometric Authentication:

Biometric authentication has added an extra layer to the security and protection of the user’s assets in the digital wallet. Several digital wallets include biometric authentication to improve security and prevent cybercrimes. This helps in securing sensitive data that is stored in the wallet. It may also include fingerprint scans, palm scans, retina recognition, and facial recognition.

Social Commerce:

Social commerce is an intersection of social media and e-commerce. This allows users to purchase any product through social media platforms. Digital wallets have been included widely in social commerce recently as these offer a seamless and secure transaction within the social media platform.

Virtual Cards:

Virtual cards are likely to become a main feature of digital wallets in upcoming years. These are also known as digital cards, designed for online transactions, and include features such as easy online transactions, temporary and disposable, security, privacy, integration with mobile wallets, and no physical presence.

Digital Wallets Market Scenario:

The digital wallet market size has witnessed a noticeable growth in 2022 and is also predicted to continue expanding during the forecast period. Factors such as changing consumer behavior, increasing use of mobile and internet, high preference for digital wallets due to easy accessibility and convenience, security features, and contactless payment trends, and rising investments in R&D activities are expected to drive global market growth going ahead.

However, there are also several challenges faced by the market, such as security concerns, limited merchant acceptance, lack of standardization, regulatory challenges, and technological barriers that can limit the market growth going ahead. To cater to these problems, businesses and leading companies are launching innovations to sustain themselves in the competitive market.

Top Players in the Digital Wallet Market Include:

Apple Inc.:

Apple’s digital wallet is used on iOS devices, allowing users to make different payments in-store and online securely. It has 2 digital wallets viz, Apple Wallet and Apple Pay. Apple Wallet is an application used to store different passes including credit and debit cards. On the other hand, Apple Pay is a proprietary digital wallet that uses NFC technology and is used in places with contactless terminals.

Amazon:

Amazon’s digital wallet service helps users make online payments on their own and third-party websites using the Amazon credentials that are securely stored in the Amazon accounts. It offers easy adding or updating card information and tracking the purchases done. It is one of the most widely used digital wallets globally.

PayPal Holdings, Inc.

One of the widely used digital wallets and online payment platforms, PayPal allows customers to make payments, transfer money from one account to another, and link accounts for different payment methods. It stores credit and debit cards, information for online payments, QR code payments, and other details.

MasterCard Incorporated:

Mastercard offers various digital wallet solutions that help users ensure a convenient electronic payment. This helps users to store their card information securely and make in-app payments with a single click. As the demand for contactless payment methods is increasing, MasterCard has adhered to the highest form of security protocol including biometrics that also supports the exchange of value to customers such as loyalty points and digital currencies.