Juniper Research has produced a new white paper on the rise of digital wallets, and what this new form of payment means for consumers and service providers. As Juniper explains, digital wallets extend both to offline and online goods payments on service providers own storefronts and third-party storefronts, together with loyalty programs, bill payments and banking services. Furthermore, digital wallet payment technology has developed to the point where they make use of a variety of different payment technologies: NFC, optical/QR codes, digital (online)-only transactions, and SMS/RCS-based transactions, Juniper points out.

Some digital wallets combine delivery alternatives, but they generally have a primary delivery approach. As seen in the accompanying graphic, the development of the digital wallet market occurred along four main paths. These digital wallets emerged focusing specifically on making the process of online payments easier. This was primarily to increase the conversion rate of browsing to buying, which can be a major source of frustration for merchants.

The focus was on simplifying the approach to completing transactions through better usability. Companies such as PayPal, based in the U.S., and Rakuten, which serves the Japanese market, allowed consumers to store their payment card details safely and accurately. Alipay is another key player in the digital wallet space that emerged from the eCommerce path. Digital wallets that focused on eCommerce initially have now expanded their product offering to enable P2P payments both domestic and nationally.

Additionally, many eCommerce-focused wallets now offer in-store payment capabilities; demonstrating the convergence of wallet capabilities between paths.

To download the Juniper Research white paper, click here.