Mobile wallets are on the rise. The use of these smartphone-based payment tools is growing at such a rate that the number of people using them is forecast to grow to more than five billion by 2026.
As payments become increasingly digital and the use of physical cash declines, more and more vendors will need to accept digital payments, and financial institutions that don’t offer mobile wallets as an option will risk losing customers.
While there are many considerations for banks and fintechs that want to create their own mobile wallet solution – types of implementation, feature set and launching the service, for instance – here’s a quick look at why this area is growing so quickly.
Here are five key reasons why mobile wallets are so popular.
1 - Mobile wallets are convenient & flexible
With many countries seeing a decline in the use of physical cash – especially since Covid-19 – mobile wallets represent a convenient way to pay for goods and services. Users can simply tap to pay as they would with a debit or credit card, with no need to handle paper notes, coins, or enter a PIN into a payment terminal.
2 - Mobile wallets are smartphone-based
Most people now have smartphones, with some countries seeing as many as 97% of citizens using these devices for entertainment, communications and buying products. The processing power and utility that smartphones provide make them an ideal platform for supporting payments, with the promise of ever-improving mobile wallet features that plastic cards can’t match.
3 - Mobile wallets appeal to younger generations
As innovation in technology continues, younger generations are at the forefront of adopting new hardware and services. The increased convenience and flexibility of mobile wallets makes them a natural fit for young people who want to make payments quickly and easily, as well as access additional features such as loyalty schemes.
4 - Mobile wallets are secure
Smartphones offer greater security features for payments than plastic cards. Encryption, tokenisation, and biometric authentication are all options for providing safe transactions for mobile wallet users, meaning they are both reliable and highly secure.
5 - Mobile wallets are an enabler for e-commerce
E-commerce companies such as Amazon offer consumers the ability to use their digital wallets to conduct transactions. It’s estimated that more than half of all ecommerce purchases will be made through mobile wallets by 2026. Digital wallets also make it easier for merchants to reward customer loyalty and engagement to encourage further purchases.
For the full breakdown on this exciting innovation, download Paymentology’s guide on how to get started with mobile wallets.
If you want to find out more about launching a mobile wallet solution and how Paymentology can guide you through this process, get in touch today.
