What is a digital wallet?

7 min read

It’s a wallet, on your smartphone!

You might have heard the term ‘Digital Wallet’ and wonder what exactly this means. If so, you are not alone. Digital wallets are a new, exciting technology which is rapidly surpassing traditional forms of banking.

A digital wallet is a service that allows the user to hold funds and make payments from an app on their smartphone. The ease and convenience of these apps has led to exponential growth in their usage around the world. For example, the two leading digital wallet providers in the US have more than 60 million users each, more consumer accounts than leading bank JPMorgan.

So why are users flocking to these apps rather than using traditional banking providers? Users find the apps simpler and more convenient than the older style banking apps. Payments can be made from mobile to mobile without the need to share bank account details, often instantly and at a lower cost than traditional payments.

In a Covid world, digital wallets also allow for contactless payments, avoiding the need to handle cash or touch payment terminals.

But perhaps the greatest reason for the growth in digital wallets is the additional, value add services these wallets can provide. Users can send a request to another app holder to be paid, split a bill between friends at a restaurant and apply vouchers sent directly to the user’s app from their favourite stores.

The growth is not just across consumers though, with small businesses also taking the lead in adopting digital wallets. The small business owner can receive payments without the need for a terminal, and at a fraction of the cost. For those wanting to go cash free, a digital wallet enables an alternative way to be paid, even if outdoors at a market or music festival.

The sad news is the leading digital wallet solutions are not available in New Zealand today. The good news is Dosh will be launching a digital wallet app including all the features described above for Kiwis later this year!

We would love for you to join us in revolutionising banking in New Zealand. Click here to join our waitlist and be amongst the first to download Dosh when we launch.