Promoted feature: Understanding digital wallets – are they here to stay?

The past 18 months of the Covid-19 pandemic has seen a significant increase in digital payments and it continues to influence consumer behaviour and removal of cash transactions. Speculations about the end of cash and physical payment methods such as debit/credit card have been around for a while, with most industry experts using this migration and the context of rapid growth of digital payments as the basis of their predictions about the future of payments.

The immediate consequence of this trend was a rise in the usage of digital solutions. AstroPay has seen digital and mobile wallets playing a vital role in the growth of digital payments and consumer demand had been on the rise even more during the pandemic. This is because digital wallets offer a convenient and safe purchase method for both the user and the operator.

Digital wallets allow users to quickly and easily make purchases online, withdraw cash and send money peer-to-peer, giving them greater flexibility when paying. By storing all consumers’ payment information securely in one place, it largely eliminates the need to carry a physical wallet. Plus, they are easy to use and very intuitive. Most digital wallets offer rewards and benefits to their users, which serves to strengthen the relationship and engagement with the product/service provider. For merchants, digital wallets allow for data collection which enables them to further understand their customers’ needs and come up with initiatives or programmes to promote their products/services and to drive loyalty of existing customers.

While the trend in digital wallets is speeding up in many parts of the world, the adoption in Asia particularly is unparalleled. India, where AstroPay operates, is the country where we have seen the most substantial uptick with a triple increase in our sales, our user growth and our total headcount. Innovation in the payments industry within the region has coincided with the rise of smartphones and the use of mobile apps. According to recent studies, digital wallets in APAC countries make up 58% of regional e-commerce payments and have surpassed cash at point-of-sale.

Will the trend of digital wallets hold?

The pandemic changed the way we shop and pay, and we at AstroPay believe digital wallets are here to stay. As more people become aware of digital wallets and their benefits, more locations and websites are accepting them as a form of payment. As a result, merchants are naturally beginning to see how digital wallets can help them build up sales and reach more customers. The increasing growth of online shopping is also having a definite impact on the popularity of digital wallets. We do not believe this trend will change post-pandemic as people have already experienced the benefits digital wallets provide.

However, we also understand that consumer behaviour is not set in stone and our success will always depend on the level of satisfaction customers experience when using new payment methods.

User experience is paramount when it comes to providing a payments service. Users do not feel at ease if they need to make multiple fulfilment procedures or if they must follow several steps to complete a payment. Delivering a journey that is as natural as possible and that only requires a few clicks to get the transaction done will result in an increased conversion rate, as well as engagement with the brand. One of the points where many potential customers drop off from the process is at the checkout. Therefore, the trend is to move towards checkouts with minimal user interaction to retain clients.

At AstroPay, we devote special attention and resources to provide an elevated user experience. We execute A/B testing, surveys and listen to our consumers’ feedback to understand their needs and what they value most from payment experience. User feedback is one of the pillars of our engineering process, and we invest in many resources and specific tools to get this valuable information and to process it for our benefit. We use different metrics to measure conversion rate, making adjustments to them when necessary. This process demonstrates how agile AstroPay is when it comes to adapting to changes and responding to feedback from our customers.

As we continue to focus on building the best user experience for digital wallets, we believe the acceptance will only grow and the use of digital wallets will only continue to accelerate.

The case of AstroPay’s One Touch

We at AstroPay have developed One Touch, our digital wallet for an instant and secure way of paying, in response to consumer demand. One Touch has significantly increased the total users up to more than 3.5 million worldwide.

One Touch not only offers a faster, easier and more convenient payment option, but also a safer one. To guarantee security, top-notch technology and IT security practices is crucial in this industry, but it is far from being enough. In our experience, the main driver for safety and security is understanding the end customer as much as possible and fostering a bond of trust with them.

With the help of behavioural analytics, the bond with customers can be enhanced to the next level. This means we know the customer, not only by the information they share or the usage they make of the service, but also based on fine-grained usage patterns such as recurrence, time of the day and special attributes. Combined with adaptive security, services can be toughened up by asking for extended authentication processes that only apply to users who do not comply with normal usage patterns. The process becomes more sensitive in identifying potentially fraudulent activities and different types of scams.

Technology and payment solutions should keep up with ever-changing user preferences. Technology and digital solutions providers can achieve this by understanding what consumers look for when paying, such as security, trust, agility and instantaneity. Those providers who manage to combine a secure environment and a smooth checkout experience will be the ones to succeed in this industry.

Mikael Lijtenstein is the CEO of AstroPay, a pioneering payment solution for consumers making online purchases on international sites. Before becoming CEO in November 2019, Lijtenstein was AstroPay’s chief operating officer, responsible for sales and operations, product development and innovation across multiple markets including Latin America, Asia, Africa and Europe. Prior to AstroPay, he worked at dLocal, a Uruguayan financial technology company, where he held several roles including head of operations and software developer. Lijtenstein has considerable technical expertise and experience in providing cross-border payments and connecting global merchants to emerging markets.