What You Need to Know About Digital Wallets

December 13, 2015

1:00 pm

Over the last 200 plus years, the concept of money has seen some major changes. It all started with trade by barter in exchange of goods and services. Later, goldsmiths started issuing receipts for the gold that they have in safekeeping and before long, people started using those gold receipts as a form of payment. The governments saw the rise of those paper receipts and they started issuing them against the gold and silver in the government treasuries

Over the last 100 years, the concept of paper receipts backed by government gold has been refined, and the money (currency) that we spend today facilitates trade and exchange. However, “change” is the only constant in life; and, now, the concept of money is undergoing some massive changes that might send paper currencies to the museum as a relic of an era long gone.

Digital Wallets on the Rise

Technology startups and established tech firms all seems to have declared war on the humble wallet. Truth be told, the wallet has lived longer than most inventions of its time. For instance, the turntable is extinct, 2-side cassettes are now museum material, filmstrip cameras, tube TVs, wall calendars and almanacs – the list is practically endless. However, the wallet has remained unchanged over the years. The wallet still contains the usual assortment of credit cards, debit cards, loyalty cards, gift cards, receipts, complementary cards, king cash, and the mandatory family photos.

Now tech companies are trying to send the wallet into oblivion as they push the rise of digital wallets. Digital Wallets are a virtual replacement of the physical wallet. They are designed to make online shopping and checkout easier as they store your personal and payment information.

PayPal

The “oldest” surviving form of the digital wallet is PayPal. PayPal lets you store your credit/debit card information and bank account information in a digital wallet. The main selling point of PayPal is that it allows you to checkout using only your email address. All you need to do is to enter your email address at checkout: the transaction will be processed and you don’t have to worry about sharing your personal and payment information with strangers. You can watch Sneha Menon and Justin Woo, both from Braintree PayPal, to talk about how startups can make payments fun:

BitGold

BitGold is an online payments and savings platform backed by real gold bullion. BitGold provides users with an avenue to buy and own physical gold. The gold is stored in secured vaults but users can access and spend the gold by using their GoldMoney Prepaid MasterCard which allows you to redeem your gold bullion instantly and spend the funds at any point of sale or withdraw local currency at ATM machines. BitGold offers a secure way to send and receive payments without running the risk of exposing your financial information because your prepaid card is not connected to your bank accounts or credit cards. BitGold is still in its earliest stages but it is gradually gaining traction.

Android Pay

Google Wallet might have been another massive force in the digital wallet space; strangely, it didn’t get much traction despite the scope and strength of Google. However, Google Wallet is being revamped as Android Pay. Android is a mobile operating system powered by Google – more than 70 percent of smartphones globally run on the Android OS. Android Pay seeks to hasten the online shopping and checkout process on mobile devices that run on Android OS.

Apple Pay

Apple Pay is Apple’s weapon of choice for killing the physical wallet. Apple figured that people already trust it with much of their personal information in their use of iPhones and iPad – why not just ask them to trust us with their payment information? Apple Pay makes it easy to run financial transactions in the real world with your iPhones. Let’s say you want to buy a cup of coffee at Starbucks, just whip out your iPhone (if it is not out already while you were waiting in line) and tap it against the NFC terminal of the POS and the deed is done.

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Ellie Martin is co-founder of Startup Change group. Her works have been featured on Yahoo! , Wisebread, AOL, among others. She currently splits her time between her home office in New York and Israel.

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