How Mobile Wallets Could Impact the Future of Banking

Since the massive changes in consumer behaviour brought about by the pandemic, contactless payment methods have been gaining popularity among both merchants and consumers. Cashless payment solutions are now the demand of the situation and digital wallets are the future of e-payment solutions.

Digital wallet solutions are more flexible, complete, and robust mobile wallet services or platforms that help their consumers in better financial experiences and respond to ever-changing market demands.

A fast-growing market

The global mobile wallet market is estimated to be $166.12 billion in 2022 and is expected to reach $363.28 billion by 2027, growing at a CAGR of 16.94%, according to a recent Research and Markets report.

In addition, e-wallet mobile app features have improved as technology has advanced. Many mobile app wallet development companies incorporate Bluetooth, blockchain, QR code, and Near Field Communication (NFC) technologies in their online wallets.

Types of?wallets

Each of the three types of wallets differs from the others in terms of payment methods. Let’s take a closer look at each of them:

Closed-loop wallet

Closed wallet is issued by a company for its consumers to buy goods and services exclusively from that company. Users of a closed-loop wallet solution may use the spared money to conduct other online transactions with the wallet’s provider.

The payments from returns, cancellations, or refunds are transferred to a secure server that is accessible via the wallet. Amazon pay is an example.

Semi closed-loop wallet

A semi-closed wallet enables users to conduct transactions at listed merchants & locations. The wallet can be used for both online and offline purchases. To accept payments using semi-closed mobile wallets, merchants must first sign agreements or contracts with the issuers. Examples are Paytm & Mobikwik.

Open-loop wallet

Open wallets are issued by banks or institutions that are in collaboration with banks. Users can use their wallets for almost all types of transactions including bank and ATM withdrawals and money transfers. Google Wallet is an example of open-loop wallets.

Entering the?market

Entering the wallet industry is a sensible move as it is highly beneficial to customers and merchants. Since a digital wallet keeps track of each transaction and gives a wide range of discounts and cashback, it is one of the best forms of payment methods available.

If you are planning to launch a digital wallet app, you will need to invest significantly in strategy and resources, and collaborate with a reliable fintech vendor.

Collaborating with a fintech software development company

To bring a mobile wallet into the market, it’s best to work with a fintech software development company that has a proven track record with financial technology products and can build exactly what you need.

They should be able to turn your ideas into an interactive, user-friendly layout that your users will love. Furthermore, ensure the fintech vendor you are collaborating with provides end-to-end services from strategy to development to implementation and ongoing support.