The social and economic lockdowns experienced by billions of people around the world in 2020 forced many of them to adopt the new payment and shopping platforms for the first time.
An Ewallet is a smartphone-based secure architecture that safely stores their users’ financial credentials and transaction data and helps in the fast processing of making and receiving payments quickly and simply.
The demand for ewallet app development in all geographies is bound to increase exponentially soon.
E-wallet App Development
With the vast potential in reserving a prominent & permanent space on the smartphones of users, many players are planning their eWallet app development. Digital wallets have become a rage in all segments of the app development industry.
Suppose you are also planning to launch your eWallet to complement your eCommerce website, digital healthcare, retail store chain, or virtual classroom solutions. In that case, choosing the right eWallet app development company is necessary.
When you hire a development partner for eWallet app development, you must prepare a roadmap with their help and stick to it.
Types of eWallets
There are three categories of eWallets – closed, semi-closed, and open. The basic features like encryption, secure transactions, transaction history, etc., are standard across all of them.
A closed eWallet app is tightly integrated with the payment gateway of the issuer. The user can initiate payments to the issuer. Airlines, hotel chains, and big stores like Walmart and Nykaa, and online stores like Flipkart and Makemytrip, have their own closed eWallets. These instruments do not allow cash withdrawals or redemption.
A semi-closed eWallet can be used to make online and offline purchases, including financial services, at specified establishments. Semi-closed eWallets do not allow cash withdrawal or redemption. Users can install a single eWallet app and make payments across different platforms. Some popular semi-closed eWallets are Amazon Pay, Apple Pay, Samsung Pay, PayTM, Citrus Cash, etc.
Open eWallets can be used for making payments, for the purchase of goods and services, making financial investments, funds transfers, and cash withdrawals at ATMs and banks usually issue these. M-Pesa by Vodafone is an open eWallet launched in many countries.
Challenges in Launching an eWallet App
When you are working towards an eWallet app development, there are many challenges, other than technological ones, that you may have to face.
The development of a secure, fast, simple, and feature-rich eWallet app, of any type, is a sophisticated task for an experienced eWallet app development company.
The central banks tightly regulate money and finance. If a jurisdiction does not allow certain features in eWallets, then you cannot provide them. The eWallet app development company you hire must know the current rules, and regulations of the target geographies.
Fraud Detection & Mitigation
People are not familiar with eWallets and can be defrauded easily. This risk is one of the biggest reasons why many people avoid using eWallets or abandon them. If your eWallet is EU-GDPR compliant, then you can easily win the trust of users across the world.
Mindset of Customers
Many customers conduct all their business using cash, checks, and sometimes ATM cards. Some of them use credit cards occasionally. Changing their mindset in using eWallets is vital to expand the market. You will have to convince them of the value proposition, security, simplicity, ease of use, and great discount benefits.
Lack of Trust
In a YouGov research it was found that more than 40% of the smartphone users have trust issues with eWallets, and a similar number of people are afraid that if their phone gets lost, they will lose all their money. If you do not trust a financial instrument, you will never keep your money in it. People also have concerns related to privacy and confidentiality.
Many consumers find using cash more convenient and simpler to manage. They think that mobile eWallet is too complicated to use and not meant for them. With proper awareness campaigns, you can coach them in using their eWallets with simple voice recognition of point and pay techniques.
These significant challenges need quick and sustained addressing if you want to be a successful eWallet operator and issuer.
Future Trends in E-wallet App Development
Technology is changing our lives in more than one way, and digital wallets are one of them. Let us discuss the top trends for the future in the eWallet app development segment.
Cryptocurrency, NFC, and Artificial Intelligence are making serious inroads in the fintech space, and eWallets are also taking a slice out of this pie.
Cryptocurrency users are among the most sophisticated fintech users. That is one reason why eWallets with cryptocurrencies are on the rise – there are over 40 million active cryptocurrency eWallets.
They provide a direct and convenient way to start investing and trading in cryptocurrencies. Some eWallet app development companies are already exploring cloud-based banking software options, allowing users to manage both traditional currencies and cryptocurrencies seamlessly.
The concerns of the security of your wallets, especially if your phone is with someone else, can be tackled easily with the use of biometric authentication for login and making payments.
Unlike pattern or PIN-based passwords, biometric authentication uses one or more of a user’s unique biometric identifiers – fingerprints, faceprint, retinal scan, iris scan, or voice recognition.
The emergence of biometric authentication as the most widely accepted verification method is only a matter of when and not if for transactions using eWallet. It also protects users from identity theft and online fraud and enhances customer trust in the solution.
Smart Speaker Payments
Smart speakers or smart home assistants working on voice commands of authorized users are popular. Amazon, Google, and Apple all have launched their smart speakers for not only entertainment but also for controlling smart homes.
eWallets can tap into these systems and allow users to make online purchases, bill payments, and order tickets or food without ever having to tap anywhere on the phone. Seniors will find this innovation incredibly helpful as they will not need to tap on their phones anymore.
Increase in mPOS
mPOS or Mobile Point of Sale are wireless devices that offer a convenient and straightforward way for merchants to accept payment. These are mobile units with Internet connectivity options using WiFi or mobile SIM. It makes mPOS the perfect handy tool for traveling salespersons, agents, and even charities to accept payments from customers.
Traditional stores and service providers can also augment their conventional POS devices with these mPOS devices and offer their customers more choices.
Near Field Communication chips and readers make it possible to make a contactless payment if both are in proximity. The eWallets from Samsung, Apple, and Google already come with NFC-enabled features.
There is no need for a PIN or biometric authentication and encrypted data transfer enables transactions at high speeds. The UK and China have seen phenomenal growth in NFC payments in public transport, restaurants, parking lots, and payphones.
Artificial intelligence and machine learning are already powering eCommerce and fintech. AI-powered eWallets can help customers to let the system make payments for regular billers like utilities, groceries, transport, cable, and phone bills.
AI can also be applied to provide users with a spend analysis and expense tracker tool. AI bots are deployed to help users self-train and resolve their issues on the eWallet platform resulting in huge savings.
The migrant workforce forms a large part of the skilled workers in many countries like the USA, the UK, western Europe, and the Middle East. These make regular payments to their families back in their home countries. Similarly, many students reside abroad for higher studies, and their parents send them money to help sustain themselves.
eWallets have come as a boon for such people in need of a secure and quick international money transfer at the best exchange rates and minimal charges. You do not need to physically visit a banker or an agent to transfer funds and pay exorbitant commissions on them.
People are increasingly on their phones for entertainment and checking their social media accounts. Instagram, Facebook, YouTube, TikTok, Snapchat, and the likes grab every eyeball on social media and businesses want to sell to such a broad targeted audience.
Social media users are more likely to use eWallets linked to their social accounts when they find a desired product or service on a platform. This integration saves them the trouble of leaving the app and go to the website or app of the seller. Click on “buy now”, authenticate a payment, and done – without leaving the app!
Cryptocurrency users are among the most sophisticated fintech users. That is one reason why eWallets with cryptocurrencies are on the rise – there are over 40 million active cryptocurrency eWallets. They provide a direct and convenient way to start investing and trading in cryptocurrencies.
If you are looking forward to launching your eWallet, then considering the key challenges and trends in eWallet app development will guide you. Hiring an experienced eWallet app development company with professionals proficient in the process and conversant with rules and regulations must be your first step.