When social media giant, Facebook, announced on Wednesday, August 25, 2021, that unveiling its digital wallet, some business owners debated whether it will displace the existing payment methods. But that isn’t true. In fact, it would add more options for shoppers to widen a wide range of payment options to choose from.
We monitored a similar debate in 2014 when Apple Pay was launched. Some people thought it would replace the replace credit cards, that didn’t happen, even up till now.
And since then other leading digital wallets have become so popular that small business owners have upped their sales.
The Official Statement:
Head of Facebook’s Crypto Unit David Marcus said the company is committed to launch its digital wallet before the end of 2021.
The Information news site quoted him as saying, “In theory, Novi could launch before Diem, but it would mean launching without Diem and that’s not necessarily something that we want to do.
“It all depends on how long it’s going to take for Diem to actually go live and that’s not something I’m personally looking after,” he said.
Facebook’s planned to have its cryptocurrency called Libra had started in 2018, but was not made public until 2019 and changed its name to Diem in December 2020, moving its operations from Switzerland to the United States.
This time, the social media platform is coming up with Novi that will enable users to store cryptocurrencies.
What Is Digital Wallet?
A digital wallet is similar to the e-wallet you are familiar with, the uniqueness of a digital wallet lies in the fact that it stores payment information to enable customers pay for goods and services at a location where there is contactless payment symbol at the checkout.
Its technologically utilises Near Field Communication (NFC) when you put your smartphone close to the payment terminal.
On confirmation and entering your password, you would be able to make payment within seconds.
Market Potential of Novi Wallet
The launch of Novi would be a great deal for the social media platform considering its number.
A data from statista.com stated that in the second quarter of 2021, Facebook has roughly 2.89 billion monthly active users.
Another data from worldpopulationreview.com, confirmed that there are over 251 Facebook users in India, making the Asian country the highest number of users of the social media platform.
It is followed by the United States with about 240 million, meaning 72% of the US are on the social media platform.
Coming back to Africa’s most populated country, there are over 29.64 million Facebook users in Nigeria in 2021 as of the time of publication. And by 2026, it’s predicted that users of the social media platform would have risen to 69.4 million.
What Does This Mean For Facebook?
To the platform, the market is huge for Novi to receive a huge acceptance by business owners across the world. For entrepreneurs, it means adding more payment options to the existing ones.
Interestingly, most Facebook users have gone beyond using the platform for social interaction, they mostly use it for making sales and getting more leads, no wonder the establishment of Facebook Marketplace which was specifically designed for sellers and service providers.
We are unsure whether the new digital wallet would be added to the marketplace at this time, but it’s time for sellers and buyers to look out for how the wallet would help meet their business goals.
How can this plan change the way small business owners operate? Would it translate to more customers and sales for SMEs around the world?
Below are the key advantages of digital wallets, which we’re optimistic that business owners would benefit from:
- Faster payment
- Record Tracking
- Easy Access
- It’s the new direction
- Competitive Advantage
- Enhancement of COVID-19 protocol
- Cost-effective management
One of the merits of an online digital wallet is that customers don’t need to carry MasterCard, Valve, or any other payment cards you’ve been using for years since you can have them in one place. They are accessible in a place.
The digital method of payment in stores online is still some steps ahead of existing methods since transactions can be done faster and quicker. No much waiting reduces queue at stores.
For online business owners and buyers, you save time. Instead of entering your card number every time you want to make a purchase, all you need is a press of a button on your smartphone since the info is already stored in the digital wallet app.
As a business owner, we talked about the importance of financial record keeping to the success of your business in one of our guides, we believe that the launch of the Facebook Novi digital wallet will enhance recording keeping.
This is because all the expenses you made will be stored within the app, this way, you will be able to check your expenses, whether there is a budget to make more buys or not.
In fact, a digital wallet payment system allows you to set a budget limit for yourself so that you don’t deep hands into your business finances.
There is no reason to embrace digital wallet unless it’s secured. And research has shown that its data is encrypted within the app, meaning e-commerce store doesn’t store your data whenever you make payment.
With the powerful security walls like fingerprint plus password and Face ID, you have nothing to worry about if your phone is stolen or lost because third parties won’t get access to your account details.
We don’t really have details if Facebook will roll out rewards for marketers for using Novi digital wallet when it’s launched, however, as a business owner, you can include rewards for using the app for shopping on your platform, this can definitely improve sales.
Enhancement of COVID-19 protocol
The outbreak of pandemic in 2020 changed a lot of things most especially about the way the businesses are done.
Digital wallet provides a solution to one of the issues of how to keep reduce overcrowded places.
It’s the new direction:
In February 2021, Nigeria’s apex bank “blocked” the trading of cryptocurrencies, but millions of Nigerian youth who know how digital currency works found their way into trading on Peer-to-Peer (P2P) platforms (https://infomediang.com/nigerians-traded-8761051btc-in-trading-week-localbitcoins-paxful)
That’s how the new generation of buyers and sellers around the world operates. Most of them prefer digital payment platforms instead of carrying payment cards around.
The incoming Facebook digital wallet will enable business owners and sellers to know what preferences of first-time buyers are.
Such shopping preferences and shopping history can be used to make recommendations for the customers.
Leveraging the digital wallets will definitely enable your business to have an edge over your competitors who still believe in the conventional ways of sales and transactions.
One of the key benefits of a digital wallet to businesses is that it helps to reduce the cost of maintaining a large team of cashiers.
The aforementioned benefits that will be inherent from Novi Facebook’s digital wallet show new possibilities and expansion. But it also comes with challenges.
What happens when your smartphone is broken or irreparable? What happens if there is a network issue at the point of checkout?
Don’t worry, the advantages surpass the disadvantages, as such, it would be inexcusable to be left behind when the world is moving in a new direction.