If you are someone who uses their mobile device to make a payment you will already be familiar with the concept of a digital wallet.
The growth in this technology has been spectacular and many consumers routinely use a mobile device, or even wearable technology like a smartwatch, to complete a transaction.
These digital wallets are designed to securely store sensitive data such as card details, ready for use at any time.
What you may not know right now is that you have two distinct options when it comes to using this technology. There is what’s known as an OEM wallet and there is also the option of a white label virtual wallet.
What’s the difference between the two and which one is the better option?
An OEM wallet explained
OEM is an acronym that stands for the term “original equipment manufacturer. It describes a so-called native payment method such as Google Pay, or Apple Pay.
The fundamental difference between OEMs is that one will be native to the device it is installed on. Apple Pay would be a prime example of this scenario. OEM payment methods can be expanded so that it has the capability of consolidating all cards in one location. That means you would be able to choose a preferred payment method rather than being forced into accepting one option alone.
In a nutshell, a basic OEM wallet is a standalone option that offers a mobile payment application native to a specific device manufacturer, such as Apple, or Samsung, for example.
What is important to understand is that an OEM wallet is not customizable.
What is a white label wallet?
The obvious question you will want an answer to is what is the difference between an OEM wallet and a white label wallet?
A white label wallet offers a more flexible payment solution.
It gives a financial institution or card issuer the ability to customize its own branded wallet. This is attractive to these providers because it gives them the ability to shape and control the way the wallet looks and feels to its customers.
Maintaining the same branding and user experience across its range of financial products is key and gives customers a degree of added confidence in using the wallet as it represents an image that they are comfortable and familiar with.
It is also important to stress that a white label wallet delivers exactly the same level of functionality as an OEM wallet. This covers critical aspects of the service such as payment capabilities and storage capacity performance.
The underlying purpose of a white label wallet and the advantage it offers is that it is a viable option whether you are using an Android or iOS device.
Excellent functionality
Another key point to bear in mind when talking about digital wallets, in general, is that they offer a great solution to the demands of modern consumers who have embraced online and mobile payment options in ever-increasing numbers.
A digital wallet can securely store a customer’s credit or debit card information so that a payment can be made directly from the card without the need to physically produce it at the checkout point, or when paying online.
In addition to this ease of use, which enhances the customer experience, digital wallets are capable of providing some other attractive and key functionalities.
A digital wallet offers the ability to process P2P (Peer-to-Peer) payments. It offers online payments, the ability to hold funds in the wallet, and store ID cards. In addition, it also offers a very useful facility where transit tickets for using public transport, boarding passes, and security passes, all of which can be stored within the wallet.
As you would expect, there is a heavy focus on providing robust security features within the wallet with a host of technologies and security protocols that work to ensure sensitive data is stored securely at all times.
Understanding the way a digital wallet works
It is useful to have a bit of working knowledge of how a digital wallet works, both from a consumer and business provider perspective.
A digital wallet is typically downloaded onto a user’s smartphone via a specific digital wallet app that has been provided. Once the app has been successfully downloaded, you will then be prompted to provide the credit or debit card details that you want to be stored within the wallet.
If you only want to use one card or add several payment options, you simply repeat the process until all of the cards you want are stored and ready for use. Security checks and a verification process will be carried out to confirm the card is valid and accepted within the wallet.
You can also choose to add further cards or update or delete, any card details that you no longer want to use within the wallet.
Each time you add a new card the wallet is primed to contact the card issuer automatically and get what is known as a token for this card. The token provided by the issuer is then used in place of your card number. This ensures that your data is more secure and it is the token that is saved on your device.
When a payment is going to be made using your mobile device, the digital wallet you have installed on the device will use an NFC chip stored with your mobile. This is a communication device that enables you to activate the intended payment in a contactless way.
In addition to using NFC technology, a digital wallet is also capable of using QR or bar codes as a way of transmitting payment information.
Digital wallets are the way forward
We were already moving toward a cashless society and digital wallet usage was rising every month before we all experienced the pandemic. That event served to accelerate the take-up of this form of payment and it is now a mainstream payment option.
Being able to make payments without the need to interact with a credit card terminal has many advantages and it is clear that digital wallets are clearly the way forward.
The benefits of using digital wallets are there for all to see and it is a payment system that helps to address a number of key security concerns.
Credit card fraud and data security have always been high on the agenda when it comes to concerns about keeping sensitive data safe. It is reassuring to note that digital wallets have been developed with multiple layers of security so that these security concerns can be addressed.
There are a number of important security protocols that have been embedded within digital wallet technology.
You will need to enter a passcode in order to be able to access the wallet. After you pass this level of security you will benefit from encrypted transmission of data. This means that sensitive data is transmitted safely between the mobile device and the server.
In addition, it is a real security advantage to be able to use tokenization technology compared to the security concerns attached to storing your real card number on your phone. This means that if a token manages to be stolen, it is a simple procedure to disable that token and reissue a replacement. This is far more efficient and convenient compared to what happens when a physical card or its details are stolen or compromised.
So many of us have grown accustomed to the convenience of contactless payment and it allows customers to achieve a much faster and safer checkout experience, with only a few simple taps.
Why white label digital wallets represent the future of payment solutions
As already outlined, digital wallets have already become the go-to payment option for many smartphone users. We have already passed a tipping point where mobile wallet usage exceeds cash payments for goods and services.
The reason why white label digital wallets should be considered the preferred option when you are setting up a payment option is that it delivers all of the benefits associated with being able to make quick and secure payments, with the added benefit that it is an option that is customizable.
That means you are not tied to specific branding. Your business will be able to customize a digital wallet so that it meets your own specifications and requirements. Plus, it can be adapted to align with your branding. This enhances the customer experiences and helps raise your business profile to another level.
When you go down the white label route you will have access to an infrastructure that is able to digitize private label cards, deliver biometric secure access, and support a variety of identification verification methods.
If this is not a compelling enough reason to embrace the idea of white label virtual wallets, you can also take advantage of the fact that you can access this technology and the flexibility it offers at a very cost-effective price.
Now that you know what a white label virtual wallet has to offer, isn’t it time you embraced the technology and take payment solutions to the next level?
Read more:
What Are White Label Virtual Wallets?