Top 10 Use Cases Of Mobile Wallets
Consumers are benefiting from the fast pace of innovation in the fintech industry in Europe. Mobile wallets, in particular, are experiencing rapid take up because of the advanced range of financial services they offer users and their simpler, more cost effective and seamless functionalities.
Globally coordinated regulatory initiatives are freeing up fintech companies to operate and explore new territory in recognition that consumers want more simplicity, seamless functionality, transparency and personalisation from their financial services providers.
As the market develops, the approach has become far more collaborative between traditional financial services businesses and the fintech disrupters, with dynamic and evolving ecosystems becoming the new norm. These collaborative partnerships are developing because the established financial services companies are recognising the benefits of not developing the technology from scratch but, instead, teaming up with innovative fintech providers.
In an assessment of the hottest European fintech trends, the International Data Corporation (IDC) found that the commoditisation of financial services has introduced much greater transparency and accessibility to the industry. It notes: “Its pushed banks to rethink their business models and to invest into new tools that allow them to provide personalized services at scale.”
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It confirms the shift towards collaboration between banks and fintech providers in developing business-to-consumer tools, including financial advice and budgeting help. The IDC finds that those players with “the best customer experience and most enriched data will be the ones to retain existing business and win new customers.”
Taylor Ryan, CMO at Valuer.ai also points to the growing collaboration between players in Europe. He believes this is because corporations lack the ability to move at speed and with agility. “Startups, on the other hand, live and breathe this mentality. This makes partnership incredibly beneficial for both parties involved.”
White label mobile wallet platforms, in particular, offer great opportunities to the established players, be they banks or retailers to expend their services. In a report published by Ovum, the consulting firm found that globally a third of issuers had prioritised investment in mobile wallet platforms. A 2019 Global Insights Inc forecasts that the global mobile wallet industry will exceed $250 billion by 2024.
The reason for the growth in demand for white labelled mobile wallet technology is that few banks are in a position to develop mobile wallets from scratch, and, says Ovum, “White label mobile wallet providers can help them.” The technology enables companies to offer their clients or employees access to a wide array of financial applications. Functionality can include payments, loyalty programmes, international remissions, employee benefits, financial guidance and monthly salary deposit.
Mobile wallets are powerful applications because they are cost-effective and readily available whenever users need them. They are also well-suited to respond to the ever-evolving needs of consumers, with their modular design enabling the issuer to add and subtract services based on customer usage and uptake.
The wallets are also increasingly device-agnostic, with developers focusing on providing companies with comprehensive integration and full customisation capabilities.
Consumers are actively embracing the following top 10 use cases offered by mobile wallets:
- Payments. The primary use case mobile wallets offer their users is arguably their payment functionality, both between wallets and from one bank account to another. Users can store the details of their credit or debit cards in the wallet and make payments safely, simply and cost effectively.
- Merchant payments via contactless technologies. With bank card details stored in the wallets, users can make onsite merchant payments via the available payment methods offered, be these Near Field Communication or QR codes. Cashless payments put an end to the inconvenience and risk of carrying wallets and bank cards.
- Bill payments solutions. Digital wallets also enable users to pay bills, such as electricity, water and rates, smoothly, securely and cost effectively. Split-bill functionality also comes in handy when sharing group restaurant bills.
- Money storage — savings. Some mobile wallets allow the user to store money in the form of cryptocurrencies, which provides the user with instantaneous, seamless access to an alternative saving account.
- Customer engagement and personalisation. Mobile wallets offer huge potential when it comes to personalising services and engaging with the user base. Not only can the mobile wallet communicate with its user in a way that is familiar to them and in accordance with their preferences but it also does so in a manner that is engaging, transparent and informative.
- Digital access to loyalty schemes. Users of mobile wallets can get rid of all of their retail and other loyalty cards by storing their details on the mobile wallet and using this to qualify for any rewards they are due.
- Rewards, coupons and discounts. Mobile wallets can be used to engender loyalty with featured providers by extending personalised offers, including coupons and deposits, to users.
- Secure hosting of financial and banking data. Mobile wallets are protected by the highest level of security. Bank account and personal information is safeguarded by using sophisticated encryption techniques to ward off hacking attempts. If someone steals the user’s phone the data is still protected by the need to use a passcode or form of biometric identification to get onto the phone and into the wallet.
- Financial guidance. The potential financial functionality of a mobile wallet is virtually unlimited. Companies can offer employees or customers access to a wide range of financial tools and guidance on the mobile wallet. These could include salary deposits, bonus payments, loan facilities, transactional capabilities, currency transfers, loyalty and reward programs, access to your retirement or Section 401(k) plans, gamified financial guidance and financial product offerings, such as long-term and short-term insurance, and investment and savings options.
- Budgeting, planning. Users could also use inbuilt budgeting and financial planning tools to monitor their spending and savings behaviour; getting a better, more informed idea of how to get through the month and still have money left to save or invest at the end of it.
From the cashless transactions through to more sophisticated, yet user-friendly, financial planning and budgeting, mobile wallet technology offers customers virtually everything they need to transact, save and invest in digital world. It’s little wonder that the take up of mobile wallet technology has been so steep and fast.