Costs
Businesses require the installation of the associated hardware that correspond to the chosen applications used. Without the installation of hardware, even if the consumer base for the business wanted to employ the use of digital wallets - this payment method would not be supported.
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With the installation of hardware, businesses also need to consider the software that users will actually be using. There are a variety of methods that business managers could choose to attain a suitable software for digital wallets.
- Develop In-house: Large companies such as Google and Apple have developed their own software, Google wallet and Apple Playbook respectively, and have flourished in entering the digital wallet market. As both companies were already large names in the technology industry, their innovative approaches to digital wallets have given them a competitive advantage over other businesses that have yet to enter the market for digital wallets.
- Hire a Developer: This option entails employing professionals to develop a software for the business. Similar to outsourcing, if a business does not have the viable resources in house to develop the appropriate software it can employ the skills of hired professionals. Due to the outsourcing aspect of this option, businesses may not choose this option because it may create some dissonance between the software developers and the business as a whole.
- License Existing Software: The business can choose to license digital wallet software from another company. The process is exactly like licensing programs, such as Microsoft Office or Oracle MySQL, but with software used to operate as digital wallets. If the business does not have a research and development team for IT then this option would be the most attractive. Starbucks is a business that has chosen this option; they use a software called Square to process transactions through their digital wallet application.
Barriers of Adoption
As stated previously, businesses require the necessary hardware and software to enable the digital wallet functionality for their company. This sounds like a relatively simple process; however, large changes that require the installation of hardware across all of the business' stores is a very costly procedure. Developing the appropriate software that a digital wallet requires entails a similar cost, if not greater.
Digital wallets are a fairly new technology that has yet to establish a firm foundation of how it is to be operated. Due to this, businesses need to train their staff how to use this technology. Furthermore, there must be maintenance for both the software and hardware, which may lead to the necessity of creating a new IT department tailored to administering updates, fixes and improvements for the technology.
Digital wallets are a fairly new technology that has yet to establish a firm foundation of how it is to be operated. Due to this, businesses need to train their staff how to use this technology. Furthermore, there must be maintenance for both the software and hardware, which may lead to the necessity of creating a new IT department tailored to administering updates, fixes and improvements for the technology.
Switching to a digital wallet system has tolls on the business but it also demands an essential item from the consumers - they must have a smartphone. Although the distribution of smartphones among the population is rapidly growing, there are still mobile device users that do not use smartphones, potentially due to difficulty or plain dislike of the product. The use of digital wallets implies one prominent and and general statement: users must have smartphones to access their features.
Regardless, the majority of individuals who own mobile devices tend to progress towards the use of smartphones so this is not the biggest issue concerning digital wallet users. The question is, will consumers gravitate towards using the new digital wallets or will they fall back upon the traditional methods of payment?
Regardless, the majority of individuals who own mobile devices tend to progress towards the use of smartphones so this is not the biggest issue concerning digital wallet users. The question is, will consumers gravitate towards using the new digital wallets or will they fall back upon the traditional methods of payment?
Future Use
The digital wallet is a new and upcoming technology that is a step towards revolutionizing the way individuals to spend money on their mobile devices. The convenience associated with it is undeniable; digital wallets allow the user to perform transactions with a single click or press of a button and it is secure. Sensitive information linked to the applications are stored on encrypted servers hosted by the company that administers the digital wallet application. This is the "next big thing" to be introduced to the market and Canadians are starting to make the switch to using digital wallets, as shown in the video below:
In its current sate, the digital wallet is a sustaining technology to improve on the traditional payment methods, such as cash, debit or credit cards. The digital wallet encompasses the vast array of cards within a single, easy to use device that is a safe way to pay. Unlike a leather wallet, the digital wallet cannot be lost because it is stored on the cloud - on the company's secure servers. Even if a user loses their phone, the application and any stored information can be deleted from a remote location immediately, through the use of another mobile device or computer. Losing a leather wallet means that the person who finds it can steal the cash, credit cards, identification and other personal belongings in the wallet, which is definitely undesirable.
The digital wallet has the potential to be a disruptive technology that completely replaces the traditional wallet and changes the way people pay across the globe. It opens the door to a plethora of opportunities and advances the use of e-commerce substantially. All that is left is to wait for the technology of digital wallets to hit critical mass and observe as the preferred way to pay be through a mobile device.
The digital wallet has the potential to be a disruptive technology that completely replaces the traditional wallet and changes the way people pay across the globe. It opens the door to a plethora of opportunities and advances the use of e-commerce substantially. All that is left is to wait for the technology of digital wallets to hit critical mass and observe as the preferred way to pay be through a mobile device.