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How Digital Wallets Transform Banking

We have an economy that is now switching to 5G, and in a few more years, we may see 6G speeds. However, the global economy’s digital transformation is far from complete. After our struggles with Covid-19 affecting both health and commerce, we have moved our world toward global, digital connectivity. For example, digital wallets will forever transform the way that we bank, shop and pay. 

Most of the world, including developed economies, is still only in the early stages of a true digital transformation. We will look at the future of digital wallets and see how they are going to be an integral part of the comprehensive digital potential that is coming to all of us. The new connected economy will be defined by several pillars, all affecting our daily lives. 

Digital Wallets

Digital wallets allow their owners to store and spend funds digitally in the form of “real” money linked to a debit, credit, gift card, coupons, or loyalty points. Digital wallets differ from other online payments because they allow the user to save payment information by adding their card or account information to the app. When payment is required, the buyer can do it straight from the app, only needing to hold the smartphone close to the reader, and not having to remember or enter payment credentials.

This is only the start of digital wallet capabilities. Digital wallets can do much more, from adding loyalty cards, airline boarding passes, movie tickets, hotel door keys, and more. The recent growth of this technology has allowed many to leave bulky wallets behind and has pushed our economy toward cashless payments. 

Apple, Samsung, and Google have all integrated these wallets into their devices and have become the biggest players in the space. Retailers like Walmart and Alibaba have added digital wallet capabilities to their checkouts, and PayPal, Cash App, and Venmo, which offer digital wallet services, have grown into financial powerhouses.  

Banking’s Future

Beyond the convenience digital wallets provide at checkout, they can potentially solve the cross-border banking problem, a difficult-to-navigate and disjointed process. Opening an international bank account is often long and painful, and international transfers can add more roadblocks and delays lasting days or more. 

New Fintech firms allow businesses to open their own international accounts with multicurrency IBAN in the organization’s name. Virtual wallets then make the process easier with same-day payments, while the company can keep funds in multiple currencies allowing for prompt payments and currency exchange. 

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