As technology and payment options advance, Canadians’ wallets increasingly are going digital.
One definition of the digital wallet – also known as an e-wallet – is a system that securely stores users’ payment information and passwords for numerous payment methods and websites. By using a digital wallet, users can complete purchases easily and quickly with contactless communications technology.
Digital wallets can be used in conjunction with mobile payment systems that allow consumers to pay for purchases with their smart phones.
They can also be used to store loyalty card information and digital coupons.
By storing all of a consumer’s payment information securely and compactly, digital wallets largely eliminate the need to carry a physical wallet. Also, digital wallets are a potential boon to companies that collect consumer data.
The more companies know about their customers’ purchasing habits, the more effectively they can market to them. The downside for consumers can be a loss of privacy.
Recent studies show clearly that the trend to digital in virtually all areas of life and commerce is speeding up.
A survey from the Canadian Radio-television and Telecommunications Commission (CRTC) shows Canadians have a voracious hunger for the Internet and data.
The number of wireless subscriptions is growing, mobile data usage is up and Canadians are shelling out more money for more data and faster speeds from their home Internet.
Another recent report from Accenture shows the trend toward mobile banking and payments is increasing, led primarily by Generation Z (18-21 year olds).
“The CRTC data is not surprising since this is a continuing trend,” Robert Vokes, managing director, financial services with Accenture Canada said in an interview.
“Gen Z’s desire for instant gratification is driving this wave for ubiquity and connectivity. Today, speed is king.”
The report found that 80 per cent of Gen Z would give up television for a day and, remarkably, 28 per cent said they would even give up friends or money to keep their mobile phone.
Gen Zers, who will make up 20 per cent of the population in just three years from now — are “naturally digital” and gravitate to mobile banking apps, with 69 per cent using them daily or weekly compared to just 17 per cent for Baby Boomers.
“Gen Zers want their mobile wallets to think for them,” the report says.
“One example would be a wallet that automatically chooses the card that offers the best rewards or savings.”