By Mikal E. Belicove|For Entrepreneur magazine|March 1, 2013
Q: What is a digital wallet, and how will it impact my business?
A: A digital wallet is an app that works as a secure digital container to store the information consumers carry around in their wallets or purses, such as credit and debit cards, ID, driver’s license, coupons, receipts, concert tickets and even airline boarding passes. When accessed by a POS terminal or other device, the digital wallet serves up the requested information and completes a transaction.
Digital wallets usually take the form of a smartphone app. They’re always on hand, connected to the internet and make it easy for coupons, deals and more to show up on the user’s device–sometimes based solely on current location.
Is it time for more small businesses to start accepting payments via digital wallet? “Yes, but thoughtfully,” says Aditya Khurjekar, a mobile-commerce expert who co-founded Money2020, a conference on emerging payments and financial services.
He points out that the question of whether to work with digital wallets is akin to the decision businesses had to make 40 years ago about whether to accept credit cards. Because consumers wanted the convenience of cards, businesses had to determine if they wanted to pay the associated costs and, if so, which cards they would accept.
Similarly, businesses today need to…
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