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The Rise of Wallet-Based Payments
A novel payment scenario is emerging within the eCommerce landscape: direct debit payments from wallet accounts. This approach offers a unique solution to a common challenge faced by merchants and marketplaces: high transaction fees.
The Problem with Traditional Payment Methods
Merchants and marketplaces often rely on credit cards and local payment methods to process transactions. While convenient for customers, these methods come with significant fees, typically ranging from 1% to 5% per transaction.
What Is a Digital Wallet?
A digital wallet (e-wallet) is a secure online platform that allows you to store your payment information, such as credit cards, debit cards, and bank account details. It enables you to make online payments quickly and conveniently, without the need for physical cards.
How Direct Debit Payments from Digital Wallets Work
To mitigate these costs, merchants and marketplaces can implement a wallet-based payment system. Here's how it works:
Account Creation: The customer selects a product to purchase.
Discount Incentive: To encourage adoption, customers are offered a 0.5% discount for choosing the bank transfer payment option.
Payment Initiation: The customer confirms the payment and receives the IBAN for the wallet account.
Bank Transfer: The customer transfers funds to the designated IBAN.
Merchant Settlement: The merchant charges the wallet account to complete the transaction.
Benefits of Wallet-Based Payments
Reduced Transaction Fees: By shifting the responsibility for bank transfer fees to the customer, merchants can significantly reduce their overall payment costs.
Increased Customer Loyalty: Offering discounts and a streamlined payment experience can foster customer loyalty and encourage repeat purchases.
Enhanced Efficiency: For marketplaces, wallet-based payments can streamline the process of transferring funds between merchants and the platform.
A Promising Future of eCommerce Payments
As more and more consumers become comfortable with digital wallets and mobile payments, wallet-based payments are poised to become a mainstream payment method. By embracing this innovative approach, merchants and marketplaces can optimize their operations and improve their bottom line.
Interested in Learning More?
If you'd like to explore wallet-based payments for your business, please reach out to us: sales@verestro.com. We're happy to discuss your specific needs and provide tailored solutions.
