eWallet Trends are changing the whole fintech market. By the end of 2023, the global E-wallet market is expected to grow to USD 2.1 trillion with a CAGR (Compound Annual Growth Rate) of 15%. But there are also some eWallet Issues, that we shall be discussing in this blog.
The emergence of eCommerce and the digital economy calls for new payment methods in the market. The online-only shift of some buyers has forced the digital ecosystem to migrate from cash payments to plastic cards, and now it is taking a leap towards contactless payments.
Contactless payment can be made through digital channels held in the cloud or on the digital wallets (E-wallet). As the world of digital payments is still evolving. Plus, Industry experts address it with a variety of names such as mobile banking apps digital money, e-money, micro payments, and many others. Also, there are several types of ewallets trends available in the market that make contactless payments a reality.
In contrast to the traditional cash/card payment methods, E-wallet is built on encrypted software technology instead of an analogue wallet. It provides a secure environment for the users to store ‘n’ numbers of debit/credit cards and bank accounts, mitigating the need to fill up payment details on every monetary transaction.
Moreover, most of the customer-facing eWallet services operate through smartphone apps. It requires users to register within the apps and create an E-wallet profile that grants them access to make instant payments.
The online payment market is seeing another futuristic technological advancement with the introduction of NFC (Near Field Communication) chip-enabled smartphones. The integration of NFC into digital payment allows the users to make in-shop payments via their E-wallet by just placing their NFC enabled smartphone within three-four inches of the contactless reader or pay pad. As almost all of the smartphones manufacturers have started equipping their mobile devices with NFC, contactless payments look like the reality of the near future.
Countries across the world are supporting online payments via eWallet for all types of transactions to track financial transactions and decrease black money occurrences. the digital wallet trends are at their peak and are expected to grow in the coming future.
If measured geographically, the major contributor to the growth of the eWallet market is North America, followed by Europe. The market for E-wallet services is segmented on the basis of application, type of e wallets, and modes.
Types of Ewallet Trends
|Close-Looped eWallet App||TimmyMe application for Tim Hortons|
|Semi Closed Loop eWallet App||Paytm, Free charge, Oxygen|
|Open-Looped eWallet App||Google Pay, PayPal|
In the case of closed eWallet, the user can only facilitate payments to the wallet issuer only. Whereas semi-closed eWallet allow users to get the financial services by only those merchants which are allowed by the wallet issuer. As such, both the closed and semi-closed E-wallets types don’t permit cash withdrawals.
In the case of closed eWallets, the user can only facilitate payments to the wallet issuer only. Whereas semi-closed eWallets allow users to get the financial services by only those merchants which are allowed by the wallet issuer. Both the closed and semi-closed E-wallets types don’t permit cash withdrawals.
Furthermore, the open eWallets goes beyond the limit of closed and semi-closed and also allow users to withdraw money via ATMs or Banking correspondents. Among all the types of e wallets, open e-wallets are the most popular ones.
eWallets by Mode
The evolution of eWallets has introduced us with new technologies which include digital wallets and mobile payments. These two modes of eWallet payment may sound identical but are very different.
Furthermore, by 2027, the mobile wallet market will reach USD 7,580.1 trillion from USD 1,043 trillion with a CAGR of 28.2%.
Almost every type of e-wallets require users to store their payment information such as bank accounts. And Credit/Debit cards and allow them to pay at any POS terminal. Therefore, digital wallets users are not required to carry their plastic money along with them as the wallet directly pulls out money from the accounts. However, the digital wallets cannot keep cash balance within the application.
On the other hand, mobile payment is a broad concept. It is similar to digital wallets but the only advantage is that it can keep the cash balance.
Digital Wallet Trends for 2023
Financial technologies such as cryptocurrency, IoT, NFC, and AI are the ones that will pave the success of e-wallets in the upcoming years. The realisation of AI-powered e-wallets that will automate the routine transactions will ease out our day-to-day payment activities.
Similarly, the digital wallet trends for 2021 include e-wallets capable of making payment via NFC (Near Field Communication) while keeping the financial data secure through blockchain technology. Therefore, there are endless possibilities for implementing innovative technologies in the payment industry. With this out of the way, let’s look at some of the top e wallet issues.
Challenges with Ewallets Trend (eWallet Issues)
Though the future of digital wallets seems very bright, there are a lot of challenges of ewallet in malaysia fintech businesses face while introducing any types of Ewallets to the market. Almost all of the eWallet issues in 2023 can be ratified with appropriate use of RegTech and other technologies. Here are some of them.
1. Regulatory Compliances
Where there is money, there will be strict compliances and the fintech businesses need to abide by all the legal regulations. Moving on, the compliances include both the financial and consumer-based regulations. Moreover, it also depends upon the ewallet technology.
2. Fraud Risk
Risk of fraud is one of the prime reasons why most customers may avoid adopting Ewallets in 2022. Mobile payments and digital wallets appear like a huge unknown risk of hacking, data theft/leak, vulnerabilities, and malware.This is yet another big ewallet issues.
The only way out of this issue is to go with an e-wallet development company that provides GDPR compliant e-wallets. Also, improvising customer onboarding KYC with blockchain technology will also be a better approach to prevent frauds.
3. Customer Mindset
Many customers still believe that there is no additional value in using ewallets. Pinging them with the latest offers associated with payments to particular merchants could be one of the way to create awareness among them. Therefore, this is one of the big ewallet problems.
4. Lack of Trust
You Gov carried out a research that states that almost 43% of the mobile users have trust issues with all the three types of Ewallets trend. And 38% are afraid that if the phone gets lost, they will not be able to make a payment or someone might steal their money. Moreover, a survey by Auriemma found that consumers are reluctant to recommend the mobile wallet they are using to their friends and family. This is one of the big issues and challenges of ewallet. Making it one of the top ewallet issues.
Now, when you see the bright future of all the three types of Ewallets trend. It’s time to move to action and bring your financial technology business to life. The Nimble AppGenie team would be happy to offer its services to help you achieve your goal. We are well versed in Ewallet app development and have the appropriate experience. Moreover, our experts can guide you through all the challenges occurring while developing your Ewallets. We will be your best choice for technology services in the financial domain.
Jermaine Trotman is the co-founder of Nimble AppGenie, a company renowned for its bespoke mobile app development and web development in e-wallet app development and fintech development.