Digital wallets are a payment option that continues to gain strength among consumers for its simplicity and ease. However, many providers may not be familiar with the technology and how it can benefit their practices and patients.
At the most basic level, a digital wallet is a digital and mobile version of patients’ financial accounts that can be easily accessed via a computer or smartphone, eliminating much of the need to carry a real wallet. Consumers can use digital wallets on payment terminals in person or through apps and websites. Examples of the most common payment types include Apple Pay, Google Pay, Venmo, and the Cash app.
The mobile and contactless payment process offered by digital wallets has become increasingly popular with patients as they expect healthcare providers to offer the convenience that consumers experience in other industries. In addition, the evolution towards digital wallets has also been driven by the COVID-19 pandemic, which caused many consumers to try to avoid contact with surfaces touched by others.
A bright future for digital wallets
Several recent reports illustrate the growing use of digital wallets and how the trend is likely to grow in the coming years. For example, the use of mobile payments in stores grew 29% last year in the U.S., according to eMarketer. In 2020, 92.3 million U.S. consumers 14 years of age or older used proximity-based mobile payments (i.e., near / contactless field communication) at least once. Half of smartphone users are expected to use contactless mobile payments by 2025.
In addition, globally, the number of digital wallet users is expected to increase by almost 74% between 2020 and 2025. By the end of 2025, 60% of the world’s population is expected to use a a total of 4.8 billion mobile wallets. according to a report by lateral. In 2019, mobile wallets surpassed credit cards to become the most widely used payment rate in the world, and growth has been accelerated by the rapid rise in pandemic-driven online shopping.
Clearly, digital wallets are a trend that is reaching out to healthcare and providers need to be prepared.
How digital wallets work
To start using a digital wallet service, a patient must first enter their credit card information into the mobile application or mobile wallet websites of your choice, such as Apple Pay or Google Pay. Digital wallet technology then encrypts the patient’s payment information so that only the patient can authorize the use of the wallet.
To execute a mobile payment with a digital wallet, the patient must authorize the transaction by keeping their mobile device close to a card reader, allowing payment data to be transmitted via near field communication, also known as contactless transaction. If the mobile device detects a near-field communication signal from the card reader, the device will prompt the patient to authenticate using normal biometric data, such as a fingerprint or facial recognition. This is much more secure than a typical plastic credit card. To determine if a merchant is equipped to accept contactless transactions, consumers should look to the card reader for a contactless payment icon, which features waves that look a bit like side wi-fi symbol.
When a patient stores their personal financial information in a digital wallet, that information is encrypted into a unique code that can only be accessed by authorized entities. Digital wallets then add another layer of security through tokenization, which replaces sensitive encrypted financial data with a series of randomly generated characters called tokens. Every time a patient makes a purchase with a digital wallet, the technology generates a random token, which can be sent over payment networks without exposing patients’ financial account numbers. When encryption and tokenization are used together, the patient’s financial information is inaccessible to potential hackers.
Benefits of digital portfolios for patients and providers
Digital wallets are becoming increasingly popular with consumers, mainly because of their convenience, as they replace physical and cash credit cards with an easy, secure, and fast payment method that can be used online or in person at terminals. payment. With no push buttons or cash to change, contactless options offer a secure and convenient payment method.
In addition, the technology is capable of storing data for multiple payment methods and patient payment preferences, including payment plan details, automatic payments, maximum payment limits, and address information. Beyond healthcare, digital wallets can store more than just credit and debit cards, allowing users to save on boarding passes, hotel reservations, concert tickets, gift cards, coupons and reward cards. fidelity to your mobile devices.
For vendors, digital wallets offer many similar benefits. By eliminating paper, digital wallets save costs and reduce paperwork for staff. In addition, digital wallets offer a faster and more convenient payment process that improves efficiency, freeing up staff to spend more time on other activities that offer more value to patient care. Digital wallet transactions work seamlessly with a payment gateway provider, as they allow card data transmitted from the digital wallet to be stored as a gateway token, which can be used for transactions. future, including recurrent, in installments or presented to the patient within a provider’s patient portal. to enhance the overall customer experience.
Digital wallets can help providers track and address the patient’s communication preferences, such as whether or not the patient has signed up for electronic statements or text messages. But perhaps the biggest benefit that digital portfolios offer providers is increasing the security of patients’ financial information through tokenization and encryption, which allows for greater peace of mind and confidence in the integrity of payment systems.
It is virtually certain that contactless mobile payments in the form of digital wallets will continue to gain adoption from consumers and patients due to their improved speed, convenience and security. Providers who have not yet adopted the technology should consider digital portfolios as an opportunity to improve the patient experience and streamline operations.
About Curtis Bauer, Head of Product Supply at Sphere
Curtis is a payment innovator, focused on making digital transactions more transparent and simple. He brings more than two decades of experience in the payments industry, with a basic focus on product, technology and corporate strategy. He has held senior leadership positions at TSYS, TransFirst and Vantiv.