In today’s world, using your phone to pay via a digital wallet is becoming more common.

Following the growing market, lots of entrepreneurs want to create their own apps to make this even easier.

But making a successful digital wallet app isn’t easy, and many people who try end up failing. This leads to the question, why do digital wallet app startups fail?

This blog will look into the common mistakes people make when they try to build these digital wallet apps.

We’ll also share some tips on how to avoid digital wallet app development mistakes so you can make an app that people love to use. Whether you’re just curious about why some apps succeed and others don’t, or you’re thinking about creating your own digital wallet app, this blog has got you covered.

Let’s dive in and learn more about the digital wallet world!

Understanding the Digital Wallet Scene

With the growing market and demand, every entrepreneur wants to develop a digital wallet.

Wondering what these are?

Well, digital wallet apps let users replace everything in their physical wallets such as cash, credit & debit cards, and important documents like membership cards, driving licenses, and store them digitally.

This basically enables users to undertake a multitude of transactions. M-PESA in Kenya and AliPay in China are the best examples of such wallet apps.

However, digital wallets offer more than just payment.

Furthermore, digital wallet apps can allow users to cut down their physical wallet contents or eliminate the physical wallet by storing everything digitally.

Developing a digital wallet and establishing a digital wallet startup is easier said than done.

And this begs the question, why do so many people want to go for one? Well, here are some fintech market statistics that show exactly why:

  • Over 6.6 billion people worldwide own smartphones in 2023, this ubiquitous presence of smartphones serves as the perfect platform for digital wallets, making them readily accessible and convenient for everyday transactions.
  • Global e-commerce sales are expected to reach $6 trillion by 2027, with a CAGR of 14.7%. The booming e-commerce landscape creates a perfect environment for digital wallets, simplifying online checkout processes and offering faster, more secure payment options.
  • eWallet statistics show that global contactless payment transactions are projected to reach $816 billion by 2026, with a compound annual growth rate (CAGR) of 19.4%.
  • Millennials and Gen Z currently make up over 50% of the global workforce and are driving the demand for digital financial solutions, making them prime adopters of digital wallets that cater to their mobile-first lifestyles and financial needs.

Now that you know the reason behind startup app ideas more focused on digital wallets, it’s time to move on.

It’s time to answer “why digital wallet app startups fail” by going through some of the common digital wallet app development problems to avoid.

Why Digital Wallet App StartUps Fail?

Why Digital Wallet App Startups Fail?

Well, with a market filled with digital wallet ideas, every other startup is in this niche. More often than not, these startups fail. So, what’s the reason?

There are a lot of things that can go wrong and so it does.

In this section of the blog, we shall be looking at these common digital wallet app development mistakes to avoid. After which, we shall also look at some tips to avoid failure of digital wallet apps.

Why Digital Wallet App Startups Fail

Let’s get right into it, starting with the first one.

1. Misunderstanding the Target Audience

Want to be successful among people?

Well, the first thing you need to do is understand your audience. And that’s one of the biggest reasons why digital wallet startup fails.

Regardless of what industry or what niche you are in now, you can no longer be product-centric.

Instead, you must think about your customers because that requires a thorough understanding of their behavior. Nowadays, this is why customer behavior is such a crucial perspective of marketing and businesses.

Misunderstanding their customer base is one of the most obvious mistakes digital wallet app startups make. Unfortunately, most businesses exaggerate their market by assuming that anyone who uses a mobile app is equally interested in using a mobile wallet.

However, you must remember that while digital wallet apps are a type of mobile application, they are totally different.

Now, you wonder, why? Well, because it offers a unique method of transacting.

As a result, people who are used to purchasing through credit cards and cash will initially be opposed to adopting this new technology. This inactivity in user behavior means that you must alter your business model accordingly.

Thus, you must create a plan that sells your wallet app and helps alter the customer’s mindset. Remember, cashback and discounts are the only short-term solutions to the problem. If you want to run in the long race, you must alter this consumer behavior.

Therefore, change customer perception through customer support, marketing campaigns, and overall business model.

If you are planning to be the next big thing in the app and not just another addition to a failed start-up, you’ll do well to avoid this digital wallet app development pitfall.

2. Being Too Dependent on the User

Indeed, in general, Mobile apps are dependent on end-users.

But we are talking about apps that deal with one’s secure or confidential information like biometric authentication, account details, or medical background.

This can overwhelm the user and as a result, people abandon these types of mobile apps.

Many people still take a back when it comes to saving card numbers and account details in a mobile app.

Here, lack of digital trust is one reason such apps often don’t work well and often fail in the market.

Let us give you a few examples of the same:

  • Chicken-and-egg problem

Scenario: A digital wallet relies heavily on user features like peer-to-peer payments or social sharing. Without a critical mass of users, these features become useless, discouraging further sign-ups.

Consequence: This creates a chicken-and-egg problem where the lack of users hinders feature adoption, which in turn discourages new users, leading to a downward spiral.

  • Unrealistic expectations

Scenario: Overestimating user engagement can lead to unsustainable business models. Relying solely on transaction fees from a small user base might not cover operational costs.

Consequence: This dependence on high volumes of user activity can lead to financial strain, forcing the startup to either pivot its model or shut down.

  • Feature bloat

Scenario: Focusing solely on adding features to please users can lead to complexity and clutter. A bloated app with overwhelming options can alienate users and hinder adoption.

Consequence: Prioritizing quantity over quality can backfire, as users might struggle to navigate the app and ultimately abandon it for simpler alternatives.

Much easier to understand now, right?

Well, that’s what makes it one of the biggest digital wallet app development mistakes to avoid, and those who don’t become failed digital wallet startups.

3. Misunderstanding Their Own Offering

Lack of self-awareness is one of the top reasons why digital wallet app startups fail.

You see, digital wallets are not just mobile wallets. They are much more than that. This holds true for all industries.

As a result, business owners must look at their offerings beyond the surface level. Undoubtedly, innovative features and relevant attributes matter.

But, in the end, you must be selling a solution and a benefit to your customers. The masses won’t find your app relevant enough to switch their purchasing behavior if you don’t.

Also Read: ewallet vs digital wallet vs mobile wallet

You must understand what your mobile app delivers in terms of benefits and value to the customers to market it according to the requirements.

So, don’t repeat this mistake as most startups do. Instead, ensure that you are not one of them.

Whether you want to build an app like Cash or go with a good ol’ PayPal clone, try to avoid this digital wallet app development pitfall.

4. Complex Navigation & App Design

UI/UX design is more important than ever.

Apps with good design have 22% higher conversion rates and 80% higher user retention rates, users form an opinion about an app within the first few seconds of using it, based solely on its design.

Meaning if the design is clunky, confusing, or visually unappealing, users are more likely to uninstall the app and never come back.

And digital wallet development companies have confessed that startups based on such ideas fail because of the complexity of their use. Make it one of the biggest digital wallet app creation mistakes to avoid.

End users cannot find simple digital wallet features like making payments, tracking transactions, checking history, balance inquiries, and many more.

As a result, without thinking much, customers can easily uninstall such apps.

But, no matter how complex or simple an app is, any app’s UI (user interface) and UX (user experience) always matter.

So, always keep in mind that a mobile app is developed to simplify day-to-day life and not complicate it further.

That’s why you pay special attention to digital wallet app design.

5. Digital Wallet Security Concerns

When it comes to mobile apps, security becomes paramount, let alone in the fintech industry that holds sensitive data.

It is witnessed that people are slow to adopt financial tools because of security issues in digital banking, and this skepticism causes various startups to fail.

Have you ever wondered? Why are digital wallet apps met with uncertainty and hesitance? 

Don’t fret; I’ve explained this here. It is mainly because of the abrupt number of bank frauds that occur.

Indeed, digitalization has been a blessing for most of us, but it has also made our data vulnerable to potential cyber criminals and data breaches.

It is understandable why many potential customers find it hard to trust digital wallet apps at the aforementioned times.

Regrettably, one of the biggest reasons why digital wallet app startups fail is why failure to build trust from the get-go has caused various digital wallet apps to fail.

Therefore, it is essential to highlight what you do to ensure the digital wallet security of the data of your customers to achieve success in this industry.

CTA-Create A Robust And Secure eWallet App At An Affordable Cost

6. Not focusing on App Marketing

One of the top 10 reasons why digital wallet app startups fail is, not focusing on app marketing.

Indeed, there could be a possibility that the digital wallet app you are about to launch is pitch-perfect, and your users would love it.

But tech-savvy customers would fall for your app only if they know about it.

This is a major mistake that most digital wallet apps make. So, always keep in mind that you are neither reaching your audience nor success in any case without the right marketing strategy.

These are a few likely reasons why so many E-Wallet-based startups have crashed miserably.

Here’s an example of this happening to a popular app:

Vine (short-form video platform, 2012-2017)


What it did: Pioneered short-form video shared with six-second clips

Why it failed: Despite massive popularity and cultural impact, Vine struggled with monetization and competition from Instagram Stories. They failed to capitalize on their early success and adapt to changing user preferences. Additionally, internal conflict and lack of investment from Twitter ultimately led to its demise.

Lesson: Adaptability and innovation are key in a fast-paced digital landscape. Apps need to evolve with user trends and adapt to competitive threats to stay relevant and secure long-term funding.

Don’t worry. Now that we have talked about what brings an app to the trench, let’s see how to take your digital wallet apps to the peak.

While this isn’t technically one of the most common pitfalls in digital wallet app development as it comes after, you get the gist of it.

7. Not Standing Out

It goes without saying that the market is filled with digital wallet apps like PayPal.

There are over 10,000 startups in this area of technology and that’s one of the answers to why digital wallet app startups fail.

You see, a lot of digital wallet startup mistakes are not standing out enough.

The digital wallet niche, being a crowded market, makes it important to stand out in a field full of established players like Google Pay, Samsung Pay, and Apple Pay.

How does this happen?

Well, this starts with one of the common pitfalls in digital wallet app development i.e. minimal added value.

If the wallet app doesn’t offer significant advantages over existing options, users won’t see the point in switching. In addition to this, as we already discussed, a poor user experience can be a great reason too.

This point is directly connected to the last one we discussed. To not fail as a digital wallet startup, one can take advantage of mobile app marketing.

8. Not Following Compliances & Regulations

One of the biggest digital wallet challenges startups face is non-compliance.

And don’t be fooled, many digital wallet app startups failed, by not avoiding the digital wallet app development mistake we are talking about.

Some examples are, as mentioned below:

Vault of Satoshi (Bitcoin wallet, 2013-2016):

What happened: Launched as a simple Bitcoin wallet, Vault of Satoshi failed to comply with Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations. This attracted legal scrutiny and eventually led to its shutdown by the New York Department of Financial Services.

Lesson: Compliance isn’t optional. Understanding and adhering to financial regulations, especially KYC and AML, is crucial for any digital wallet operating in regulated markets.

Now, there are many types of regulations in the digital wallet and fintech industry as a whole. Including popular ones like GDPR and PCI.

Being one of the most common mistakes in digital wallet app development, you can take the help of RegTech experts to become compliant as a startup. Doing this will take you a long way.

Now that we are done with the top reasons why digital wallet app startups fail, it’s time to look at some examples of successful ones in the section below.

Popular Examples of Successful Digital Wallet Startups

A lot of people ask why digital wallet app startups fail. While this is important to avoid common digital wallet pitfalls, it’s also important to look at examples of successful startups.

The market is filled with successful digital wallet apps that we use in day-to-day life. Let’s look at them:

Example 1: Square App in the USA

Square Cash App

The Square App is a perfect example of how a startup used a new model to alter user behavior.

This mobile application proved to be a great bridge between buyers and sellers. It provided the latter with a smooth POS solution.

The reason behind using the POS solution is it enables the business to accept payments from customers and keep track of sales.

Rather than changing their customer’s behavior or preferences, it merely focused on modifying the actions of the merchants instead.

  • Point-of-sale integration: Seamlessly connects with Square’s point-of-sale systems, creating a closed-loop ecosystem for merchants and consumers.
  • Peer-to-peer focus: Simplifies spending and receiving money between individuals, making it popular for social payments and splitting bills.
  • Business-oriented features: Offers business tools like invoicing and inventory management, catering to the needs of entrepreneurs and small businesses.
  • Fast and reliable transactions: Emphasizes instant transfers and secure payments, building trust and convenience for users.
  • Expanding ecosystem:Branching out beyond payments with Square Capital for business loans and Square Marketing for promotional tools.

Example 2: M-PESA in Kenya


Indeed, M-PESA App enables users to do more.

Customers can easily view and manage their finances with the new features now available with just a few taps on your smartphone.

This is the reason why M-PESA became one of the most popular digital wallet apps across the globe. What M-PESA did to solve this issue was simple. It merely digitalized this method of transaction without changing it at all.

So, rather than eliminating the need for intermediaries, it provided a digital solution to them, which helped smooth money transfer through the Hawala system.

The mobile payment platform is banking the unbanked.

  • Mobile accessibility: Leverages mobile phone penetration to reach unbanked populations in Africa, promoting financial inclusion.
  • Offline functionality: Works even without internet connectivity, making it reliable in areas with limited infrastructure.
  • Versatility beyond payments: Facilitates a range of transactions like savings, loans, and bill payments, becoming a central financial hub.
  • Agent network: Utilizes a vast network of agents for cash deposits and withdrawals, ensuring wider reach and convenience.
  • Driver of economic growth: Contributes to economic development by enabling micro-transactions and supporting small businesses.

Example 3: Chime in the US

Chime Fintech App

Well, who hasn’t heard of Chime?

Founded in 2013, Chime is a mobile banking app that offers fee-free banking services, early access to paychecks, and automatic savings features.

Targeting millennials and underserved communities, Chime has amassed over 20 million users and disrupted the traditional banking model.

It is a mobile banking app that offers services loved by millions of people. That’s what makes it one of the best fintech apps in the market.

  • Fee-free banking: Eliminates traditional banking fees, attracting cost-conscious millennials and underserved communities.
  • Early paycheck access: Provides a competitive advantage by offering early access to paychecks, improving cash flow for users.
  • Automatic savings features: Encourages savings through tools like round-up transactions and automated transfers, promoting financial wellness.
  • Mobile-first banking: Prioritizes a user-friendly mobile app, simplifying banking tasks and making it accessible on the go.
  • Community focus: Fosters a community with educational resources and financial tips, empowering users to make informed financial decisions.

Example 4: Klarna in Europe

Klarna Shop now. Pay later

Let’s talk about Klarna

It is a buy-now-pay-later solution that allows users to spread out the cost of online purchases over time.

Its digital wallet app facilitates these payments and offers additional features like loyalty programs and price comparison tools.

Klarna has over 90 million active users across Europe and the US. And it has inspired a lot of people to create and use apps like Klarna.

  • Buy-now-pay-later focus: Klarna caters to a specific need, allowing flexible payment options for online purchases and appealing to budget-conscious consumers.
  • Seamless integration: Integrates with thousands of online stores, making buy-now-pay-later a readily available option during checkout.
  • Social features and rewards: Gamify the experience with loyalty programs and social sharing incentives, boosting user engagement.
  • Expansion beyond payments: Offers additional services like price comparison tools and subscription management, becoming a one-stop financial platform.
  • European dominance: Holds a strong position in European markets, partnering with established banks and retailers for wider reach.

Example 5: Revolut in Europe and Beyond

Revolut Send, spend and save

If you are planning to start a digital wallet startup, there are high chances you have heard of this app: Revoult.

Founded in 2015, this app offers a feature-packed digital wallet app targeting global citizens.

Users can hold and exchange multiple currencies, send and receive international payments, invest in stocks and cryptocurrencies, and track their spending.

Known for its innovative features and sleek interface, Revolut has over 20 million users worldwide and is pushing the boundaries of what a digital wallet can be.

Here’s how banking apps like Revolut have become successful in the market:

  • Multi-currency accounts: Hold and manage over 30 currencies with real-time exchange rates.
  • Borderless payments: Send and receive money internationally at low fees, as this is one of the top cross-border payment apps.
  • Investment options: Buy and sell stocks, cryptocurrencies, and precious metals within the app.
  • Spending insights: Track your spending habits and set budgets for different categories.
  • Subscription management: Easily manage and cancel subscriptions directly from the app.

With that out of the way, it’s time to look at how to create your own successful digital wallet startup in the section below.

How To Create A Successful Digital Wallet Startup?

It’s time to look at tips to avoid failure of digital wallet apps startup.

Tips To Create A Successful Digital Wallet Startup

Here, we shall be going through some points on how to create a successful digital wallet startup, starting with the first point.

1. Delivery Information

Your customer shouldn’t be confused about where they can use your digital wallet app and where they can’t be.

Instead, you must provide all such detailed information to them from the get-go. This reduces the hassle of finding shops and increases the usage rate of your digital wallet apps.

2. Keep Security Your Priority

After writing this much, I can say that making a secure digital wallet app is necessary. If you don’t do so, you will lose out on customers.

In addition, you must pay close attention to making your digital wallet apps as safe as possible.

It is necessary to develop a robust app security framework for your digital wallet apps to protect your clients from hackers and engage more customers.

3. Give Immediate Payment Status

Must ensure to update all parties involved immediately after payment is made using the digital wallet app.

In addition, give them detailed reports about where their money went.

Let’s have a look at one example.

If a transaction isn’t completed due to some error, don’t hide this issue from your customers; but instead let your users know about it.

Also, tell them what you are doing to fix the issue. As a result, being transparent with your customers improves the chances of your long-term success.

4. Accommodation Trends

Market is filled with up and coming digital wallet trends.

Now, if you plan to stay in the market and put your strong hold, it’s important to accommodate these trends and imbed them in your solution.

This will give you leverage over other apps in the market, helping your platform catch more users and generate higher revenue.

5. Don’t Over-Complicate It

Convenience is the prime factor why users feel motivated to use a digital wallet app rather than carry around a physical wallet.

So, it’s a good idea to overcomplicate when it comes to digital wallet app development mistakes at any cost.

It is seen that no one likes complex apps that take too much space on their smartphones or consumes more time to use.

Therefore, make the interface user-friendly, and develop a light yet simple app.

ewallet app security

Work With Nimble AppGenie – A Digital Wallet Development Company For Startups

Do you have an idea for a digital wallet startup that you think will disrupt the market?

We have a secret formula that turns ideas into successful digital wallet app startups. We are here to help you.

Nimble AppGenie, being a renowned eWallet App development company, is the master of delivering innovation in the form of digital products.

Recognized by platforms like DesignRush, TopDevelopers, GoodFirms, and Clutch. co, we have the right tools and hands-on experience for 700+ projects. Includes:

  • Pay By Check– Pay by Check is a popular ewallet mobile app in the United States of America. It allows users to transfer, pay, or even exchange currency.
  • DafriBank– Digital Bank of Africa is a leading banking portal that also allows users to trade cryptocurrencies and provides e-wallet advantages.
  • SatPay– An eWallet platform is a Versatile eWallet Solution that allows users to request, receive, and send payments without hassle.
  • CUT– an E-wallet Mobile App, CUT is available in China and Myanmar. It works well with both RMB and MMK currencies.
  • SatBorsa– a Currency Exchange Fintech app. SatBorsa is one of the platforms that is available on both platforms, iOS and Android.

If you want to Hire mobile app developers who can convert your idea to reality, we are here to help you.


The guide gives the top reasons why digital wallet app startups fails. The success of a digital wallet startup hinges on avoiding common mistakes, understanding user behavior, prioritizing security, and embracing market trends. Learning from examples like Square, M-PESA, Chime, Klarna, and Revolut, startups can thrive by offering value, ensuring a great user experience, and adapting to evolving customer needs. Effective marketing, compliance, and transparent communication are also vital factors that contribute to the growth and longevity of digital wallet apps in today’s competitive landscape.

Bonus: Why eWallet Startups Fail Infographic

Here’s a visual representation of the reason for the failure of digital wallet app startups.


Some common mistakes to avoid include misunderstanding the target audience, being too dependent on the user for sensitive information, failing to understand the unique value proposition of your digital wallet, having a complex navigation and app design, overlooking security concerns, not focusing on app marketing, not standing out in a crowded market, and not following compliances and regulations.

Understanding the target audience is crucial because digital wallet apps require a change in user behavior. Assuming that anyone who uses a mobile app will automatically be interested in using a mobile wallet is a mistake. Startups need to alter customer perception through marketing campaigns and customer support to encourage the adoption of digital wallets.

Security concerns in digital wallet apps include the potential for data breaches and cybercriminal activity. Users are hesitant to trust digital wallets due to the increased risk of bank fraud and data vulnerability. It’s essential for digital wallet startups to prioritize security and build trust with customers.

To ensure the success of a digital wallet startup, consider providing clear information about where the app can be used, offer immediate payment status updates to users, keep the app user-friendly and simple, prioritize security, and stay flexible to technological advancements. Additionally, analyze market trends and adapt your business model to fit user behavior.

Sure! Some examples of successful digital wallet startups include Square App in the USA, M-PESA in Kenya, Chime in the US, Klarna in Europe, and Revolut (Europe and beyond). Each of these startups targeted specific user needs and provided innovative solutions.

Successful digital wallet startups typically stand out by offering added value, prioritizing a great user experience, focusing on security, following regulations, and staying adaptable to market trends. They also often target specific niches or user groups and understand their unique needs.

Marketing is crucial for the success of a digital wallet app. Even if the app is well-designed and functional, it won’t succeed if users are not aware of it. Effective marketing strategies are essential to reach and engage potential users.

Successful digital wallet apps often offer features like seamless point-of-sale integration, peer-to-peer payment capabilities, business-oriented tools, fast and reliable transactions, mobile accessibility, offline functionality, versatile transaction options, and a wide network of agents for cash-related services.