Library: One Inc – Five Things Insurers Need to Know About Digital Wallet Payments

Executive summary:

In March 2020, the Merriam-Webster Dictionary added contactless to its word list. They define it as relating to or “being a technological system (as for making payments) where information is transmitted without physical contact”.

Digital payments are not the future – they’re already here

From a trickle to a flood

The sudden rise to fame of contactless payments is also noted by Morgan Stanley Research. They found that every key digital wallet provider, including PayPal, Venmo, and Apple Pay, saw a significant increase in adoption in 2020.

The total percentage of consumers using a digital payment service leaped from 70% in 2019 to 78% in 2020. And 40% of those surveyed confirmed they had a payment card stored in their mobile wallets.

Why insurers need to know

These stats reveal why terms like ‘contactless’ and ‘digital wallet’ need to be included in every insurer’s vocabulary right now – especially those intent on delivering an exceptional customer experience. To avoid being left behind, insurers need to be talking about, and finding ways to capitalise on, the many opportunities that digital wallets present.

What is a digital wallet?

A digital wallet is an app or cloud-based software that allows a customer to make and accept payments via their desktop device or smartphone without sharing their payment details. It acts either as a storage mechanism for actual funds or as a storage mechanism for payment details (eg, credit or debit card details, bank details). Knowing that the average American carries four separate payment cards, it is easy to understand why a single digital wallet on a smartphone, which most people always carry, is fast becoming many customers’ payment method of choice.

These are the five things insurers need to know about digital wallets.

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