A digital wallet refers to an electronic device, online service, or software program that allows individuals to conveniently store and access their payment information and credentials for transactions. Digital wallets are also sometimes referred to as e-wallets.
The rise of digital wallets and e-wallets has had a monumental impact on payments and financial services over the past decade. As more commerce and financial transactions move to online and mobile environments, a Saas-based digital wallet has emerged as a secure and efficient way for consumers to pay.
Benefits of Digital Wallets
Digital wallets offer a variety of benefits to consumers and businesses:
Convenience – Rather than entering payment details manually for every transaction, digital wallets store payment information in one central place. This saves time and hassle at checkout.
Security – Digital wallets often use tokenization or encryption to protect payment credentials. This helps reduce risks associated with traditional payment data storage.
Rewards and loyalty programs integration – Many digital wallets integrate or connect with popular rewards and loyalty programs to allow consumers to easily redeem points or rewards during transactions.
Budgeting features – Some advanced digital wallets have personal financial management features to help consumers track spending or set budgets.
The Rise of SaaS Digital Wallets
Historically, digital wallets were offered primarily by device manufacturers (e. g. Apple Pay) or individual payment networks (e.g. Visa Checkout). However, a new breed of financial technology (FinTech) startups have begun offering white-label digital wallet solutions delivered through cloud-based Software-as-a-Service (SaaS) platforms.
What is SaaS?
SaaS stands for “Software as a Service” and refers to cloud-based software solutions that are delivered to customers on an on-demand basis over the internet. Rather than installing software locally, SaaS allows customers to access applications remotely via the cloud.
Benefits of SaaS Digital Wallets
Compared to traditional digital wallets, SaaS-based digital wallet solutions also called Wallet as a Service offer some key advantages:
Flexibility – SaaS wallets can more easily support multiple payment methods, currencies, and types of transactions in a single integration.
Scalability – Cloud-based infrastructure allows SaaS wallets to efficiently scale up or down to support fluctuations in transaction volume.
Speed to market – Because they are turn-key solutions, SaaS digital wallets allow faster time-to-market than custom in-house development.
Updated features – SaaS providers frequently add new features and functionality via automatic software updates rather than sporadic traditional software releases.
SaaS Digital Wallets Shape the Financial Industry
Backed by these advantages, SaaS digital wallet solutions are starting to shape and transform different segments of the financial services industry:
Challenger Banks Leverage White-Label SaaS Wallets
So-called “challenger” banks, who compete with legacy banks by offering branchless and digital-first banking, are early and eager adopters of SaaS digital wallets. By integrating a white-label SaaS wallet, challenger banks can provide modern payment functionality without investing heavily in in-house development.
Features like tokenized card storage, QR-code payments, peer-to-peer (P2P) money transfers, loyalty/rewards integration, and flexible acceptance of third-party wallets all help challengers compete with legacy players.
Prominent financial technology startups like Rapyd, Paymentology, and CashFlows now offer challenger banks white-label SaaS wallet solutions for rapid integration.
Retailers Adopt SaaS Wallets for Branded Checkout Experiences
Retail companies also show growing interest in SaaS-powered white-label wallets. Creating their own digital wallet allows retailers to control the consumer experience post-checkout and build branded customer relationships that span across shopping channels.
Retail digital wallets can unify loyalty programs, provide AR experiences for shoppers, deliver customized promotions based on purchase data, and more. By owning the wallet relationship, retailers also avoid giving third parties like Apple or Google access to purchase data.
SaaS solutions from innovators like CashFlows, CellPoint Digital, and Omnyway enable advanced branded retail wallet capabilities that enhance customer experiences and loyalty.
Payment Facilitators & Gateways Add Wallets for Value-Added Services
Finally, payment facilitators and payment gateways help move money between merchants, banks, and card networks. These players act as middlemen connecting the entire payments ecosystem.
By integrating SaaS white-label digital wallets into their technology stacks, payment facilitators can offer value-added services on top of payment processing: account-to-account transfers, global payout capabilities, bill pay features, card issuance, and more.
FinTech startups like CashFlows, Rapyd, and Paymentology offer whitelabel digital wallet solutions tailored specifically to facilitate these value-added payment features for transaction intermediaries.
By leaning on the capabilities of SaaS wallet platforms, payment facilitators futureproof their offerings and provide flexibility as payments evolve.
Key Features Provided by SaaS Digital Wallets
Now that we’ve highlighted some industries adopting whitelabel SaaS-based wallets, let’s examine some of the key features offered by these modern digital wallet platforms:
Tokenized Card Storage and Provisioning
SaaS wallet platforms use tokenization to enable secure card storage and provisioning. This allows card details to be stored on file without exposing sensitive card numbers within the system. Tokens act as secure references to the underlying payment credentials.
Retailers, banks, and payment facilitators can all use SaaS tokenization to easily store customer cards on file for future one-click or recurring payments.
QR Code / Barcode Payments
To enable mobile payments at the point-of-sale, SaaS digital wallets commonly support transactions via QR codes or barcodes. This allows consumers to easily scan and pay at checkout from their mobile wallet app.
QR-based payments are growing exponentially globally thanks to adoption in markets like China and India. SaaS solutions make it easy to introduce QR payment acceptance.
Peer-to-Peer Money Transfers
Many SaaS wallets additionally facilitate account-to-account (A2A) money transfers or peer-to-peer (P2P) transactions. This allows easy direct payments between wallet users, without requiring bank details. Users can send funds between each other by simply using a recipient’s email address, mobile number or wallet ID.
P2P money transfer capabilities help differentiate wallets from traditional payment products. These features are valued in both banking and payments use cases.
Multi-Currency, Crypto, and Cross-Border Support
Modern SaaS platforms also allow wallets to easily expand beyond domestic currencies and forms of payment. This includes:
– Multi-currency support for global consumer and retailer wallets
– Integrations with popular cryptocurrencies and crypto wallets
– Cross-border payment acceptance and payouts
Exchange rate conversion and settlement into local funds helps facilitate global digital wallet usage.
Branded Wallet Apps and Card Programs
Lastly, SaaS wallet solutions allow the creation of fully custom-branded wallet apps for iOS and Android mobile devices. This provides a recognizable and consistent wallet experience across smartphone apps.
In addition, whitelabel card issuance integrations from companies like Marqeta let businesses create tailored physical payment cards tied to their digital wallets. These cards enable use of wallet funds in brick-and-mortar stores.
Conclusion
In summary, SaaS-based digital wallet solutions are rapidly reshaping payments and financial services:
– Challenger banks gain modern mobile wallet functionality via white-label SaaS platforms
– Retailers build branded wallet apps to control post-purchase experiences
– Payment facilitators use SaaS wallets to provide value-adds like money transfers
Leveraging cloud software, whitelabel wallets deliver tokenization, QR payments, P2P transfers, and more. These features help innovators in finance compete in the digital economy.
SaaS flexibility, scalability, speed-to-market, and global capabilities will ensure wallets remain at the forefront of digital transformation across the financial services sector.
Digipay is a fintech platform that provides cashless banking, online payments, virtual cards, and digital financial solutions.
DigiPay.Guru is a globally recognized fintech solution provider that offers advanced digital payment solutions to banks, fintechs, financial institutions, NBFCs, and businesses. Our comprehensive suite called DG Bank provides products and services such as Mobile Money, Agency Banking, International Remittance, eKYC, Prepaid Cards, Merchant Acquiring, and Scan & Thru.
We help businesses design solutions to revolutionize financial markets by building mature, flexible, customizable, and future-proof digital platforms. Our solutions are available in both “License Version” and “SaaS Model”.