Small Business Guide to Leveraging Digital Wallet Payments

Research shows that US cash transactions at retail points of sale have slumped to just 13%.

However, it’s not only card payments that are replacing cash; digital wallet payments are growing at an impressive CAGR, expected to rise 15% from 2023 to 2027. 

So, as a small business owner, leveraging digital wallet payments could help you to remain competitive. keep reading to learn how you can reap the benefits of mobile payments.

What are Digital Wallets? 

A digital wallet – also called an e-wallet, or mobile wallet – is an application that stores payment information securely on your smartphone or tablet. What for? Shopping and making purchases, both online and physically, without having to carry cash or cards. 

Ever heard of Apple Pay, Google Pay, or PayPal? These are some of the most popular digital wallets customers use for mobile payments. Apple Pay alone boasts more than 507 million users, as per 2023 reports. 

Benefits of Mobile Payments

If you’re running a small business, mobile payments can help you reap a host of benefits. 

• Unmatched Convenience  

Think about this: a customer visits your store, sees a product or service, and with a tap on their mobile phone, they make a purchase. No waiting for card approvals – just an instant purchase.

That’s the kind of seamless experience that can increase your sales in any market. Customers are more likely to make impulse buys if they know the payment process will be quick and easy. 

• Satisfied Customers 

Faster transactions mean happier customers. Did you know that mobile payments can cut checkout times down to half of what the card payments call for?

Time is literally money, and this is the kind of efficiency that keeps lines moving and customers smiling. Faster transactions mean way fewer issues during peak hours or seasonal rush.

• Security 

Security is a big issue. Anything that involves money but doesn’t prioritize security can be an absolute bummer.

Digital wallets make the best use of cutting-edge technologies, like advanced encryption and tokenization. This helps to safeguard the sensitive information of your customers and prevent fraud. 

Additionally, you can’t be robbed if you’re not carrying cash.

• Better Cash Flow

As a small business, having a smooth and quick cash flow is really all that’s needed to scale your business. With digital wallet payments, this is exactly what you’ll get.

Transactions are fast, meaning you’ll receive funds in your account sooner too. The result? Better cash flow and more opportunities to make reinvestment decisions. 

• Loyalty Programs 

Do you want to reward your loyal customers? Digital wallets can make the process of integration a breeze for you without the need for extra cards or applications.

You can integrate loyalty programs directly into the payment process, so your customers can earn points or discounts with every purchase.

How to Get Started with Digital Wallets

Now that you’ve got the hang of digital wallets and their benefits, how can you get started with their implementation?

1. Choose the Right Payment Processor

Explore different payment processors that can support digital wallet transactions.

Make sure you avail the services from providers that offer competitive pricing, and comprehensive security features best for small businesses like yours.

2. Upgrade Your POS System

Make sure your POS is compatible with mobile payments or digital wallet payments.

For example, many modern systems now come with NFC technology. This allows for contactless transactions as your customers make a purchase from you.

3. Train Your Staff

Proper training is essential for your employees.

Equip them with the required information and skills to process digital wallet payments. This will really help to satisfy your customers.

4. Promote Your New Payment Option

Grab your customers’ attention and let them know how you are making the best use of digital wallet payments.

Use banners in your store, post on your social media and employ whatever marketing techniques you can to boost engagement.

5. Track Performance and Adjust

Keep a tab on your transaction data, as well as customer feedback regarding digital wallet payments.

This way, you can refine your strategy and make the necessary tweaks when needed.

Final Thoughts

Digital wallet payments are no longer some nice-to-have feature for your small business. They’re a must if you want to cut through in the new competitive and convenient business space

There are many benefits to digital wallets for small businesses, including happier customers, more sales and smoother operations.