In the light of the pandemic, many entrepreneurs have transformed their businesses into digital platforms. The Digital wallet is one such example that has entirely come into existence.
Entrepreneurs are moving towards mobile wallets because they deliver an excellent user experience. That includes top-notch security, easy checkout processes, etc. A study by Statista has shown that by 2023, there will be nearly 1.31 billion mobile payment transactions.
We witness new technologies emerging in digital wallets that make them more advanced each year. 2022 is no different, and to stay competitive, entrepreneurs (like you) must know the latest trends.
In this blog, we’ll get to know the nitty-gritty of digital wallet apps and the latest trends to flourish one’s business.
What Is a Digital Wallet App?
As the term suggests, a digital wallet app is an online tool that lets users make payments using their smartphones. It securely stores the end user’s payment and transaction history data. A Digital wallet is also known as an ‘eWallet’.
Users can easily complete their purchases with the help of “Near-Field Communication (NFC)“. They can even set a strong password or Face ID to secure their eWallet app.
Digital wallet apps are accessible on Android and iOS devices. Some of the well-known examples of mobile wallets are Apple Pay, Google Pay, etc.
eWallets are categorized in 3 following ways:
1. Closed Wallet
Closed wallets are issued by a company that allows only a specified audience to make payments using their app. Users of closed wallets are allowed to use store funds only with the wallet’s issuer in order to complete a transaction.
eCommerce business owners, online retailers, and franchises leverage the features of a closed wallet, and Starbucks is one such example of this wallet app.
The entire amount gets stored in the closed wallet app during the transaction cancellation.
2. Semi-Closed Wallet
End-users can make payments at the listed merchants or stores in a semi-closed wallet. In this type of digital wallet, merchants accept the agreement with the issuer for taking the payment from the wallet.
Semi-closed wallet keeps the user’s data safe in one place and simultaneously maintains their confidentiality. The user can send money to another receiver belonging to the same wallet network.
Semi-closed wallet offers smooth transactions and seamless refunds as it adds multiple addresses. Two well-known examples of a semi-closed wallet app are- Apple Pay and Venmo.
Banks issue open wallets that permit users to manage their payments online and track the entire transaction process. Open wallets are flexible that easily transfer funds and allow users to make online payments anytime they want.
In an open wallet, both receiver and sender’s accounts are required on the same app to make payment. This digital wallet is directly used in a third-party application.
One of the well-known examples of a digital wallet app is PayPal, which provides an excellent user experience.
Why Should You Develop a Digital Wallet App?
Technology is evolving, and so does the digital wallet app development sector. Well-known apps, like Apple Pay, Google Pay, and PayPal are already gaining huge profits from mobile wallets.
Digital wallet helps thrive the business as it reduces the cart abandonment rate leading to more revenue generation. Mobile wallet apps have an easy checkout process that encourages customers to complete their purchases.
Another reason for choosing a digital wallet app development is top-notch security that maintains the privacy of users’ data. Simply put, investing in a digital wallet app development company to build a high-end mobile wallet app is worth considering.
Top 5 Trends of Digital Wallet App to Follow in 2022
1. Biometric Authentication
Security is one of the major concerns in digital wallet app development because no user wants their data leaked. With the integration of biometric authentication into eWallet apps, online transactions are becoming more secure.
Biometric authentication is replacing passwords with fingerprint scanning and facial recognition. This trending feature helps in securing the user’s financial data stored in the mobile wallet app. As a reliable security measure, biometric authentication remains highly useful in eWallet apps.
2. Risk Assessment
Cyber fraud and theft risks in the digital wallet app can hamper the user’s experience. So, to ensure that the eWallet app has fewer chances of making bugs enter the app, a risk assessment is essential.
AI-powered eWallet apps make daily payment activities convenient as artificial intelligence algorithms identify software threats. Besides AI, machine learning also helps detect frauds from thousands of daily online transactions.
Algorithms of ML analyze the money transaction history stored by banks and other financial institutions. Gradually, the machine learning-based software notes down the difference between normal and fraudulent transactions.
3. NFC Payments
Another emerging digital wallet app development trend is “Near Field Communication” (NFC) payments. NFC technology is much quicker than pin code technology.
The near-field communication technology enables smartphones to interact through NFC card machines within close proximity. With the help of near-field communication technology, users can instantly transfer the encrypted data to the point-of-sale device.
NFC also helps in enhancing operational efficiency as users no longer have to wait in queues, and it simultaneously increases customer satisfaction.
4. Budgeting & Planning
Users can leverage budgeting & financial planning as eWallet apps have an in-built category that includes entertainment, traveling, food, etc. These categories act as financial guidance that tells the user’s overall expense.
They get more informed ideas about which area they’re spending more in and how much savings they’ve made. You can even stick to your predetermined budget by topping up your eWallet with a limited amount.
In short, frame a monthly budget, and let digital wallet apps do the rest by tracking your daily expenses.
5. Financial Guidance
The financial ecosystem in the digital wallet has salary deposits, bonus payments, transactional capabilities, loyalty, and reward programs. These can also be termed financial tools that let users assess their retirement or section 401(k) plans and gamified financial guidance.
Users can also facilitate fund collection, debts, or saving automation through the financial guidance available in the digital wallet app.
The digital wallet app is here to remain. So, developing an eWallet app for your business will be appreciated.
Moving along with the latest trends in mobile wallet apps is one factor that helps in keeping one’s business ahead of the competition. So, ensure to stay updated with every emerging latest trend.