Technology
E-wallets: The payment upgrade for marketplaces
Global Banking & Finance Review®
Company
The range of payment methods offered is one of the most important decisions online retailers and marketplaces must consider when designing the checkout process. If a customers preferred payment method isn’t offered, or if a payment process is too cumbersome or seems unsafe, customers can abandon the...
The range of payment methods offered is one of the most important decisions online retailers and marketplaces must consider when designing the checkout process. If a customers preferred payment method isn’t offered, or if a payment process is too cumbersome or seems unsafe, customers can abandon their shopping carts and leave websites in doubt.
E-wallets are a great way for marketplaces to optimise the payment process for both merchants and buyers. Guido Kuhring, Head of Sales Central and Northern Europe at Mangopay, discusses what this looks like in practice.
E-wallets are electronic wallets that allow users to send and receive digital payments. This is possible thanks to a corresponding software application that stores digital currencies and payment information, allowing authorised users to access them.
E-wallets can be used for online purchases on e-commerce websites as well as marketplaces, or for payments on mobile devices. A customer’s own e-wallet can be topped up via bank transfers, credit cards or other digital payment methods. For example, if a customer wants to pay with an e-wallet on a marketplace, they select this payment method and confirm the amount to be paid. The transaction is then processed via their e-wallet and the money is transferred securely and quickly to the marketplace seller’s e-wallet.
E-wallets are a fast and convenient payment method for all marketplace players. Customers can store their payment details in their e-wallet and access them instantly to make payments as and when needed. This speeds up the payment process, making it more convenient and can help customers shop more frequently on a marketplace. In addition, this supports marketplaces to strengthen customer loyalty as well as their revenues; by easily implementing loyalty programs, promotional offers, and discounts with e-wallets.
Another significant advantage of e-wallets is security. By storing their money digitally, users do not have to re-enter their bank or credit card information for each purchase. After all, this carries a certain risk as the data can be stolen or misused. E-wallets offer an additional layer of security, as customers only store their sensitive data once.
Users can top up their digital wallets with various payment methods, such as credit cards, bank transfers or other digital payment methods. This allows them to select their preferred payment method and use the money in the e-wallet quickly and easily for multiple transactions within a single platform. Simply put, e-wallets offer users both simplicity and flexibility.
In addition to the buying side, e-wallets are also an important factor for the selling side of marketplaces. Depending on the needs and business model of the marketplace, e-wallets can store collected funds securely and in compliance with regulatory requirements, for an extended or shortened period of time. This way, marketplace operators gain flexibility and technical control over payment processing and payouts without coming into contact with the funds themselves.
The range of payment methods offered is one of the most important decisions that online retailers and marketplaces must consider when designing the checkout process. Customers often abandon their shopping carts and leave the website if their preferred payment method is not offered or if the payment process is too confusing or even seems unsafe. E-wallets are a great way for marketplaces to streamline the payment process for both merchants and buyers.
When customers place an order on a marketplace, they typically need to enter their payment information and go through a predetermined payment process before they can complete their order. This process is time-consuming and cumbersome at worst, especially if customers need to re-enter their payment information each time. By integrating e-wallets, marketplaces can make their checkout process faster and more convenient. Customers can store their payment details in their e-wallet and easily access them as needed to complete orders with just a few clicks. Processing international payments in different currencies is also faster and less complicated.
Ultimately, e-wallets bring simplicity, security, and flexibility to payment processes on marketplaces. They allow users to virtually manage their balance, check their account balance and make payments in a straightforward manner, while making it easier for sellers to manage their revenue and monitor their cash flow. The more flexible the e-wallet infrastructure used, the better it can adapt to the processes of the respective marketplace and ideally support workflows
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