In this digital age, life seems paralyzed without smartphones. We might survive a day outside without our wallets, but without our smartphone, stepping out of home seems impossible. It is because smartphones have brought everything to our fingertips, from online surfing to shopping, education to entertainment, and now wallets too. You can easily pay with a few taps on the screen in a fraction of minutes. And with the governments worldwide supporting digital money more than ever, the popularity of mobile app wallets have witnessed an insane hike. The use of mobile app wallet is not limited to online shopping but also extends to offline activities. As per the trends, businesses have started adapting to the change to provide customers with easy payment options via mobile wallet apps.
As per statistics by Fortune Business Insights, in 2019, the global mobile payment market accounted for USD 1.18 trillion and is expected to increase by leaps & bounds in the coming years. The market is witnessing surplus growth, so is the competition. Apps like GooglePay, Paypal have made their way into the majority’s smartphones. That does mean there’s no space for a new member, but if you’re planning to enter, make sure that you backup your motive with more than enough research and the right plan. If you haven’t started then you’re at the right place to begin this journey.
Introduction to Mobile Wallet App
A mobile wallet is a smartphone application that is designed to transfer money or make payments. It integrates with various payment options like UPI, debit/credit card, etc., alongside other features like coupons, rewards which make it preferable over cash. Whether it’s the extra discounts or the ease-of payments, mobile wallets have turned out to be a one-stop destination for global consumers.
Every mobile wallet has a predetermined set of such other features that make it unique. For instance, Google Pay has earned popularity for its scratch cards that are offered with every transaction. Paypal, on the other hand, provides multiple payment solutions, unlike GooglePay which caters to direct account transfers.
Understanding The Mobile Payment Industry
It would be unreasonable to move into something without exploring the statistics. So, here are some industry facts that will amaze you.
Did you know that the mobile payment industry is growing by almost 60% every year? Also, a survey found that, at present, there are over 5 billion people globally who make financial transactions using their mobile phones. And last year, it already made a record by accounting for financial transactions worth USD 1.18 trillion. These numbers are enough to convey the potential of this industry.
The mobile payment industry has benefited other sectors too, especially the following:
Retail - In the retail sector, mobile wallets are widely used by eCommerce platforms as well as offline stores. While the former employs it by integrating various payment solutions with their platform, the latter has been adapting to the mobile wallet trend by allowing customers to pay via different applications. Using such apps, the users can simply store sales information & initiate payment via cashback, coupons, etc.
Financial Sector - They enable consumers with provisions like credit cards, debit cards, and furnish them with administrations.
Telecommunication & Tech Enterprises - These can be considered as neutral players of the financial sector who find themselves with more odds of having mobile wallets integrated with multiple payment options.
Based on their use by respective industries, mobile wallets can be of different types.
Types of Mobile Wallets
Mobile wallets can be of different types with variations in payment processing mode. Some of the most popular are:
- Mobile service providers powered mobile wallets allow users to send and receive money through their respective service providers.
- Wallets that provide discounts through OTP (or any other code) received on SMS. Usually, the discount is credited to the linked bank account or card.
- Wallets with mobile web payments. With these, a user can send as well as receive money using the mobile app.
These are the most commonly used mobile wallets. As technology is advancing, you might come across many other variations. Trends are changing as mobile payment wallets are coming together with telecommunication service providers. Every mobile wallet has its nuance and many may vary drastically for the payment method.
Types of Mobile Payments
The mobile payment industry has come a long way. While earlier, it enabled customers to store information (along with PIN) for transactions, now, the improved versions allow them to save all payment information for vouchers, cards, and much more. This means that you can simply make purchases with any eCommerce site and use your e-wallet for payment without security threats. The credentials you fill in cannot be stored by the merchant with mobile POS. For many reasons like ease-of-access, security, and added benefits, people are now switching increasingly to e-wallets. At the same time, they have as many options as hundreds of mobile wallet companies have established globally. With that, one can find different companies offering different types of payment options varying from each other on KYC norms. Below are the different types of mobile wallet payment options available:
- Open Payment - These are services provided in collaboration with respective banks that allow you to withdraw from an ATM, buy products, transfer funds, etc. Such types of e-wallets allow users to make transactions directly through mobile devices.
- Closed Payment - Closed payments require the user to provide a security amount for the merchant. It is an e-wallet that is generally used by eCommerce companies or businesses. In such cases, the merchant locks some amount of your payment to safeguard future chances of cancelling or returning. It is very popular amongst brands like Amazon, Flipkart, and similar eCommerce websites.
- Semi-Closed Payments - Such payments exercise location limitations. This means that semi-closed payments can only be made by people living at specified locations only. These are generally used by companies tied up with varied merchants. Also, it does not allow redemption or cash withdrawal. For example, PayTM is a widely-used platform that allows users to buy products & services but they cannot redeem the money.
- Semi-Open Payments - These too, like semi-closed do not allow redeeming of funds. Semi-open payments can be made with any card that accepts POS terminals for the purchase of goods & services.
Now that you are acquainted with the different types of payment methods and the mobile apps, let’s move on to some of the features that you must take into consideration for its development.
Mobile Wallet App Features
With the rapid industrial growth, the mobile wallet app development has great opportunities to offer but so is the competition. You need to make sure that your mobile app has the following features to beat the dominant giants.
- Prepaid: Your mobile payment wallet should be able to allow the users to pay in advance since waiting in a cue is the last thing your customer would want.
- Real-Time Data: The app should be able to provide customers with real-time information regarding transaction details.
- Forms of Payments: Your app should allow your customers to use any payment method they please. For this, you should integrate your app with as many solutions as possible. After all, you would not want your client to cancel his purchase due to payment inconvenience.
- Rewards & Points: Some extra never hurts but can benefit, especially if that extra is about providing additional services to your customers. You can reward your existing customers with loyalty points redeemable on future purchases or coupons.
- User Interface: You must keep the User Interface very simple and engaging. It should be user-friendly so that they do not get caught in the complex web of your app. A simple and easy-to-navigate design will allow them to easily browse through the application & enhance their overall experience.
- Multi-Platform Support: Compatibility with devices is the key to an app’s success. You should make sure that your e-wallet is compatible with all major mobile devices & platforms.
- Security: Last but most important of all, security is of key concern for all e-wallet users. While using your application, they must be entering highly confidential information to make purchases or money transfer. With data being such an important issue, you should ensure them of your reliability in protecting their confidential information.
Based on tap & go characteristics, mobile wallets not only make our lives easier but seem to be an effective movement towards a paperless economy. It might seem a little step but can add up to make an effective change & enhance environmental sustainability. It has especially proven to serve the purpose in the unprecedented times of COVID-19 where social distancing became a norm and people would prefer a touch-free transaction through mobile payments instead of exchanging physical currency.
If you’re, too, planning to create a mobile wallet app, make sure you enter into the battlefield with appropriate weapons. Hope this blog post guided you to the beginning of your mobile wallet app development project. The journey will behold much more. Keep tuned for more information & updates.