Digital wallets (also known as mobile wallets or eWallets) usually refer to an online service that provides a secure, virtual storage space to facilitate point-of-sale (POS) transactions and access related information. They store encrypted information, such as credit cards and reward cards, and often perform tasks like automatically filling out online order forms. Most can be used through any device, from desktop computers to mobile phones. They function on websites, within apps, and in physical stores.
Digital Wallet Usage in Canada
Data indicates Canadian consumers are embracing digital wallet options and online retailers are taking notice. They’re growing in popularity in Canada as a more convenient and secure way to purchase both online and offline.
As more Canadians come to understand how eWallets can protect them when shopping online, usage will increase. For example, security is a primary reason why online shoppers use PayPal, a basic, early version of a digital wallet. They can fund PayPal with their credit card or check out using PayPal even if they don’t have an account, as long as the merchant offers it as a payment option. The merchant never sees their credit card number and it isn’t stored by them. Without the security advantage, PayPal wouldn’t have grown into the payment giant it is today.
According to the PayCanada Payments Pulse Survey, 33 percent of Canadians are interested in apps like Google Pay (Android), Apple Pay, WeChat Pay and Alipay (via MotionPay) as payment options in Canada. The option is most desired by consumers aged 18-34, males, urbanites and those with children under 18 years of age.
Nineteen percent of Canadians have uploaded an eWallet. Seventy percent of digital wallet users in Canada have used it to make a purchase. Canadians age 18-34, males and those earning more than $80,000/year are most likely to use a digital wallet.
Online merchants enjoy benefits from eWallets too, including fraud protection and a lower rate of shopping cart abandonment. Online businesses are also spared the headache of secure data storage, since they never actually see credit card numbers. The savings from fraudulent eCommerce transactions alone often make any vendor fees or other associated expenses worthwhile. Fee structures vary among vendors, ranging from a flat rate to a percentage of sales.
A lower rate of shopping cart abandonment further increases the value of digital wallets. Fifty-three percent of Canadians have abandoned an online shopping cart or left a store due to an inconvenient checkout experience, and one in ten have done it more than once. Consumers who are most likely to do so are age 18-34, as well as those from the Prairie Provinces and Ontario.
A frustrating check-out experience may include navigating long order forms or a lack of preferred payment options. Canadians are very concerned about the level of security of their online transactions and data. Many small business websites may lose sales solely because the shopper was concerned about using their credit card on a website they’re not familiar with. If you facilitate payment using eWallets, you eliminate that concern.
Additionally, Canadian businesses use digital wallets to better serve international markets. Alipay, for example, is the primary means of online and mobile payment for Chinese consumers. There are over 520 million active users in China, who may be more inclined to purchase from Canadian online retailers if the option to use the app is available. WeChat boasts over 1 billion monthly active users.
“Chinese consumers are a rapidly-increasing segment for Canadian merchants,” said Eric Paquet, president of Motion Pay Technology Inc.
The benefits of eWallets are broadening to include other benefits for merchants, such as Google Pay’s ability to push offers from merchant websites and tracking gift card balances. They can be especially useful in omni-channel situations, where merchants can utilize them both online and offline.
How Canadian Merchants Can Work with a Digital Wallet Vendor
Each eWallet service and financial institution works with businesses differently. You can find information for merchants on digital wallet websites that will walk you through sign-up options. The sign-up process and implementation is usually straightforward. The most popular digital wallet options in Canada are Google Pay and Apple Pay.
??? Do you use eWallet or mobile payment features to better serve online customers? Please share your experience or questions in the comments below.
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Melody McKinnon's formal education is in business management, which she enhanced with more than 60 certifications revolving around business, marketing, health, general sciences and writing. In 25 years of working online, she has owned or managed both educational and ecommerce websites. Her book, 7 Recession Proof Online Businesses to Start From Home, is available on Amazon.
Melody has worked with many businesses & brands in a multitude of capacities. She can often be found on CanadiansInternet.com, CanadianFamily.net and AllNaturalPetCare.com, as well as other quality digital publications. Her content has earned reference links from highly-respected websites, magazines and university textbooks.