Over the past decade, growing mobile connectivity has given rise to innumerable business opportunities and consumer-centric developments, among which the mobile wallet has grown beyond expectations.
From taking low-quality pictures to QR code scanning, and from mere internet browsing to digital payment applications, mobile phone technology has significantly advanced to deliver more convenience to users as fast as possible.
Money transactions are an obligatory part of everyday life, representing boundless potential for different payment solutions to be utilized in various commercial settings. One could say that initially, e-commerce platforms had already laid the foundations and shown the viability of secure online payments, inspiring technology companies to seek ways to make them simpler.
What pegs the smartphone as an ideal platform to offer payment alternatives to users is that telecom leaders indicate there are more than five billion unique subscribers of mobile phone connections around the world. This figure demonstrates a vast target base for banks, technology firms and fintech startups to influence people with access to mobile phones.
The consistent rise in the affordability of mobile devices and networks is ensuring that more consumers are able to enjoy all the services available online, looking for easier and quicker ways to complete various tasks. It is, therefore, unsurprising that the global mobile wallet market, which is slated to surpass a remuneration of $250bn by 2024, has seen an incredibly large number of competitors emerging to develop better, safer and faster payment methods for physical and e-commerce transactions.
Moreover, some would argue that the rapid advancement in cybersecurity and data verification techniques has made digital payments more secure than many web-based services. Although the probability of data being compromised is still existent, dedicated security teams at tech firms and innovations in technologies such as blockchain will keep fortifying mobile wallet platforms, encouraging consumers to store and spend money digitally.
How have the benefits of the mobile wallet helped consumers?
Despite harsh criticism from skeptics, the advent of the mobile wallet can be considered to be a boon for consumers who desire a comfortable and safe way to execute financial transactions.
Credit and debit cards, probably the initial 'paperless' currency format, had clearly been developed for reducing the need for carrying large qualities of money and making swift payments securely. Later on, the advent of the internet allowed these cards to be used for online purchases. But it is obvious that all physical forms of currency come with their own limitations, such as the need for extra space, possibility of theft, fees and usage charges.
A key disadvantage of physical currencies, however, is that they can be used only for their monetary value, while on the contrary, mobile wallets enable a range of services to complement digital payments on a single platform.
Take the case where a user needs to transfer money to a family member, pay their electricity bill and order a new pair of sneakers, all on the same day. Such services could be found on specific online portals earlier, but mobile wallet applications allow them to be performed instantly with money stored in the digital wallets, without needing access to a computer or taking a credit card out of a physical wallet.
With convenience being a major factor in the adoption of mobile apps, digital wallets can store information of different credit and debit cards of a user to allow faster money loading on the platform. The tremendous expansion of the online retail industry has warranted the adoption of digital wallets such as Google Pay, Amazon Pay, PayPal and Paytm.
A fast-food customer, standing in the queue of a restaurant where payments through mobile wallet are accepted, can add money, scan a QR code and pay the amount in less than a minute via an app, while the customer need not carry plastic currency. To make even the holding of a card simpler, banks including Standard Chartered and HSBC support the storage of cards issued by them directly on a digital wallet such as Samsung Pay and Apple Pay. This has proven to be a significant innovation driving the deployment of mobile wallets, offering additional methods for users to make secure payments.
In recent times, the mounting interest in cryptocurrencies has resulted in the development and availability of convenient 'crypto-wallets', which provide the aforementioned benefits, as well as options to invest the currencies.
What are the benefits of mobile wallets for small businesses?
Customer satisfaction is greatly associated with convenience and servicing time, as any business would agree, and mobile wallets have the potential to offer solutions for quick checkouts and payment notifications.
Cashless transactions are extremely fast and secure, and accepting digital payments will enhance the customer experience significantly for small businesses, including convenience stores, supermarkets, ticket booking platforms, restaurants and apparel outlets.
Besides, becoming adept in the latest technology will provide the businesses an edge, for competing with online shopping and home delivery platforms. They can also attribute loyalty points to customers and accept digital coupons, consequently using mobile wallets to expand their customer base.
Small banks and retailers who adopt to the convenience of the mobile wallet technology fast enough could avoid losing customers to the attractive, easy-to-use services being offered by global banking institutions and international brands.
Apart from customer experience, mobile wallets will help businesses to digitize their accountancy procedures and records effortlessly, as they start accepting more payments from consumers via digital transactions. There would be accurate payment records, automated generation and delivery of invoices to the customer, along with considerable reduction of certain overhead costs. Businesses also need to keep in mind the remarkable speed at which the cryptocurrency trend is catching on.
A number of countries have already legalized the sale and purchase of goods and services using crypto, with many of the international banks, retailers and other businesses ready to accept crypto payments. Undoubtedly, as more consumers gain access to these currencies, they would want to use it in their daily life and small enterprises will need to be prepare themselves for allowing payments through cryptocurrency mobile wallets.