During the pandemic, mobile wallets overtook card-based payments and became the most widely used payment method globally. Mobile wallet solutions have become the booster of the continued disruption of the payment landscape.
Fintech has redefined digital payments by bringing convenience and rapidity to the financial services industry. Lately, many tech giants and start-ups across the globe have launched their digital wallets by partnering with mobile wallet solution providers. At this speed, the global mobile wallet market is expected to reach the size of $5,250 billion by the end of this year.
Currently, mobile wallets are popular because of their ease of use and top security. Though, Fintech providers can add more value to the market by introducing feature-rich, fully customizable, and scalable mobile wallets.
Let’s look at all the possible disruptive features that fintech providers can offer in mobile wallets and how it is already affecting the future of digital payments.
Salient Features Attracting Customers to Mobile Wallets
Some of the most common and customer-centric features of the existing mobile wallet solutions are - zero-liability protection, added security, and a better user interface. It is not surprising that people are increasingly switching to mobile wallets considering that it is used by many retailers if not most of them.
Apart from these standard offerings, below are more technical and purpose-oriented features that would make a mobile money system stand out from the rest.
Contactless payments through NFC and QR
Near Field Communication (NFC) is a set of communication protocols that allow wireless communication between NFC-enabled mobiles and POS terminals. It is based on RFID technology which identifies devices within a range of only a few centimeters. Using the mobile wallet’s extended NFC feature, users can pay just by tapping their smartphone to a terminal and entering the PIN.
Quick Response code is another contactless payment method that works by scanning a QR code from a mobile wallet solution. This method is widely used for paying money at retail outlets.
Analytical Dashboards
Overspending is one of the top reasons why people get into debt or fail to pay their monthly bills. A well-designed e-wallet solution would do more than just make payments. Analytical dashboards in mobile wallets can help users track their spending so they can avoid exceeding their budget. Users can also get a better idea of their spending habits and patterns through visualized transaction data and history. This visualization can be personalized to track spending in different categories.
Management of Virtual Loyalty and Reward Cards
Gone are the days when people used to store coupons, loyalty cards and rewards in physical wallets. Digital wallets already have this capability to sense whether the transaction qualifies for loyalty/reward offers or coupons. This is a win-win situation for both customers and merchants who can be e-commerce, Fintech start-up companies, and so on. Customers no longer need to carry unnecessarily stuffed wallets to redeem offers, and merchants no longer need to remind customers to swipe their loyalty cards.
Seamless and Easy Wallet-to-Wallet Transfers
Fintech developers have made mobile payments seamless and easy by bypassing banks and credit card providers. These wallet-to-wallet money transfers are transaction-free. They are not governed or regulated by any bank. Hence, the mobile wallet money becomes ‘merchant currency’. A well-designed e-wallet solution coupled with a robust customer engagement program would empower customers to buy, borrow and exchange stuff using merchant currency.
Emerging Mobile Wallet Trends
The usage of mobile money systems has exploded since the pandemic provided a solid advantage to capitalize on alternative payment methods. Digital wallet companies have also contributed to this explosion by tapping into the general trade from mom and pop stores to restaurants. Here are some of the emerging trends that will decide the future course of mobile wallet evolution.
Rise of Cross-Border E-commerce
Mobile wallets are at the core of booming cross-border e-commerce as they are making international transactions easy. This provides merchants with tremendous potential to expand into new markets.
Telcos at The Center of Digital Entertainment Convergence
As the mobile wallet is becoming an attractive payment method, mobile and telecom operators are looking to leverage this method to maximum advantage. Mobile operators and OTT merchants are beginning to realize the worth of ‘bundling’. Using telecom bundling both parties can drive higher average revenue per user (ARPU).
Dominance of Mobile Wallets in Emerging Countries
It is also noteworthy to mention that emerging countries like Africa and the Middle East were the birthplace of mobile wallets. Among over 310 registered mobile wallets in 2020, over 50% belonged to Africa only. In these countries, mobile wallet solution adoption is expected to grow by 147% from 2020 to 2025.
Banks are Moving into E-wallets
As was expected, customers are giving up mobile banking apps to embrace digital wallets with robust payment processing and information access. Non-banking players like Fintech start-ups and tech giants have significantly penetrated the payments landscape, threatening banks’ relevance. Thus, it became inevitable for banks and other financial institutions to prioritize millennials and generation Z. Thus, banks are increasingly investing in a new set of capabilities around e-wallets to create strong selling points and retain customers.
Partner with a Fintech Provider to Meet your Digital Payments Goal
Considering the exploding state of the mobile wallet market, the next step for any financial services provider should be to launch a mobile money system. For this, they need to partner with the right Fintech solution provider that understands your business goal and can efficiently handle the nitty-gritty of compliances.
Panamax’s MobiFin Mobile Wallet solution can help you launch a feature-rich mobile wallet solution following an extremely easy process.
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