With advanced technologies hitting the market, the e-wallet industry is looking forward to new, interesting trends in the future.
E-wallets have been on the rise even before the pandemic. By 2019, mobile wallets increased their customer base with an average of 140 million of new users globally, with researchers estimating that the digital payment method will account for 28% of all point of sale transactions by 2022. The COVID-19 outbreak has further accelerated e-wallet adoption. According to Livemint, digital wallet services have experienced a nearly 50% surge in transactions since the pandemic’s start. The UK-based e-wallet solution STICPAY alone has recorded a rapid 88% growth in Asian transaction volumes during the COVID-19 outbreak.
However, the boom in digital wallet usage doesn’t mean that innovation halts among service providers. With advanced technologies hitting the market, the e-wallet industry is looking forward to new, interesting trends in the future. Read on to find out the top five digital wallet trends of 2020.
Significant Surge in Contactless Payments
Remember the times when you had to push your card into the POS machine, type your PIN, and wait for the transaction to complete?
It could be the standard a few years ago. However, with a shift to cashless and coronavirus-safe payment methods, consumers are increasingly using contactless payment methods for transactions.
Contactless payment methods use Near Field Communication (NFC) technology that allows wireless data transfer between two devices (e.g., a POS terminal and a smartphone) for transactions.
Since customers don’t need to reveal their card details, contactless NFC transactions are not only faster but also safer and more convenient than “traditional” card payments.
With all these benefits, contactless payments are on the rise. Before the COVID-19 pandemic, a Juniper Research report predicted that the contactless payments market will increase from 2020’s $2 trillion to $6 trillion worldwide in the next four years.
A few years ago, in the U.S., contactless payment methods represented a rather small market share. However, due to the pandemic’s effects, over half (51%) of consumers are using NFC-capable methods for transactions, according to a MasterCard study.
New Opportunities for Fintech Innovation
In light of recent events – such as when U.S. banks took stimulus checks to cover unpaid debt or fees , the COVID-19 pandemic will likely decrease the trust between traditional banks and consumers.
While it is indeed bad news for traditional service providers, this presents new opportunities for fintech innovation.
For example, common problem consumers face amid the pandemic is the rising number of payment fraud and cyber attacks.
To minimize the risks of its users, STICPAY introduced a wide range of advanced security features to its e-wallet service, such as strict KYC/AML monitoring, anti-fraud measures, as well as the segregated customer fund storage.
As another example, to fulfil the growing demand in this area in Asian countries, e-wallet solution GrabPay created a merchant service (GrabPay Link) that allows sellers to accept payments on social platforms and digitized Ramadan bazaars.
In addition to GrabPay Link, the e-wallet solution allowed merchants to accept cashless transactions, which allowed the service to record an over 60% growth of new users between March and April.
Increased Demand for Faster Transactions
With a transition to a digital society, there’s increased consumer demand for faster transactions.
While contactless NFC payments allow instantaneous transactions, consumers have a much different experience when trying to transfer funds internationally.
Due to the obsolete nature of cross-border payments systems, an international transfer has to go through multiple correspondent banks before reaching the recipient’s account.
As a result, the transaction becomes expensive, taking several days to execute.
To solve this issue, STICPAY has partnered with financial institutions to provide fast and cost-efficient local bank wire withdrawals for its e-wallet users.
Currently, STICPAY users can withdraw their funds with local bank wires in several countries – China, the Philippines, Indonesia, Malaysia, Singapore.
However, as there’s increased demand for the fintech e-wallet solution’s local bank wire options, STICPAY will further expand this feature in Southeast Asia, as well as in India and Africa.
Enhanced Artificial Intelligence Solutions
Artificial Intelligence solutions have been rapidly advancing in the past few years.
As a result, it’s becoming the norm for businesses to integrate AI into their products and services.
This trend will eventually reach e-wallet services too, integrating AI to provide customer service chatbots, automate transactions, or detect payment fraud more efficiently.
Growing Number of Loyalty Programs
E-wallet service providers have tremendous opportunities to offer loyalty programs to their customers to attract new prospects while keeping existing users engaged.
Ranging from reward points to store discounts and special promotions, it has become even more crucial for e-wallet solutions to introduce loyalty programs to survive amid the COVID-19 era.
According to a recent report, while 67% of consumers are requesting loyalty functionality in mobile wallets, users who don’t redeem rewards are 2.3 times more likely to defect than customers claiming benefits in the past 12 months.