Are You Ready for a Digital Wallet?

By Janet Hutchins on May 13, 2011 | Filed in Uncategorized

We live in a society that is becoming paperless. When was the last time you wrote a cheque? You can pay bills online, do your shopping online. You can even send payments to your friends and family digitally — no need for cash or cheques to change hands. Ever. And now Visa is introducing the digital wallet.

What is a Digital Wallet?

A digital wallet would be a place for you to store all of your payment information. It would allow you to use any mobile device to make payments as well. We’ve written in the past about the possibility of you smartphone becoming a credit card. North Americans are about ready for this technology to take off.

Visa’s digital wallet takes it two steps further. Your digital wallet would support NFC payments through the Visa system payWave. This near-field communication is a way for your devices to communicate with point-of-sale terminals in order to complete contact-less transactions. Your digital wallet could also be used to complete online transactions from a single device. And Visa’s payWave also supports person-to-person payments. The digital wallet would truly be a centralized place to store and control all of your payment information, including credit cards and third-party payment systems.

Fast Company reports that Visa plans to roll out the digital wallet in Canada and the U.S. by the fall of this year. And, apparently, U.S. Bank and the Royal Bank of Canada are participating. Here is what Fast Company reports about what a digital wallet like this could mean for consumers:

But what will it actually do for us as consumers? It’s pretty clever, actually. First is a system called “click-to-buy” that simplifies the entire process of e-shopping a little like Amazon’s “one click” does, only across all sorts of platforms. Visa’s acting as your online financial ID manager, meaning that instead of typing in a billing address, payment details and so on into a shopping site, you’ll simply enter an email address or some kind of ID. Visa will handle all the transactional details and security verification, instead of each different online store doing so, which is potentially more secure.

The possibilities, from merchant offers and discounts, to easy payment, appear to be endless. You really could put your entire financial life — your whole wallet — on a single device. It would be interesting to see how this would interact with money management apps like Mint.com, and investment apps, but it could probably integrated.

For now, it’s mostly about payment. But there is definitely the potential for more growth. It also appears that Visa is trying to be ahead of the game, setting up a system for NFC payments. Other companies, like Google and Apple, have been dabbling in NFC payment options, but Visa appears to be making the push to make it reality.

Here is a video that Visa made about its digital wallet:

Image source: Everaldo Coelho via Wikimedia Commons.