Millions of users use mobile wallets on a daily basis. Payment through mobile devices appear to be something out of the future but the truth is that the technology is already here and is getting popular day by day. A number of mobile wallet service providers like Google Pay, Amazon Pay, Samsung Pay and Apple Pay have already dominated the market.
With the increasing number of mobile payment users, let us check out the opportunities and challenges that the technology has to face in the coming years.
Opportunities For Mobile Wallets
Better Reward System
Research has shown that consumers are more inclined to use a loyalty program if it is connected to a smartphone application. The mobile wallet service providers use this opportunity to engage more brands with their customers by offering rewards. Several wallet providers like Google Pay, Amazon Pay, Paytm offers discounts on brands if the payment is conducted through the mobile wallet.
Usage Of Mobile Banking
Mobile banking services are offered by a number of banks nowadays. The main motive is to increase the number of cashless payments. As more and more consumers use mobile wallets to transfer money from one account to another, the banks will continue coming up with new applications for mobile transfer.
Many banks use Mobile remote deposit capture to take checks from a consumer who uploads the check photo electronically to the bank. This is just a result of mobile wallet payments which enhances convenience and efficiency for the customers as well as the bank.
Lack Of Access In Rural Areas
According to data from RBI or Reserve Bank of India, India has the largest number of families who still do not have a proper bank account. The numbers are close to 145 million families. For the economic development of any country, the rural areas play a massive role. Many individuals in rural areas do not have access to traditional banking systems.
With the help of mobile wallets, these people can easily create bank accounts to conduct business transactions without the need to physically visit a bank branch. The digital payment solutions will pave way for new opportunities with the increase in Internet users. The rural areas will pave way for more opportunities to capitalize on.
More Preference For Mobile Payments
With the increase in smartphone usage among tech-savvy consumers, the use of mobile payments is encouraged nowadays over traditional payment methods. Studies have shown that 3 out of 10 people will opt for mobile payments if they get an opportunity to do so. The increase in online retail stores has increased the use of mobile payments up to a certain limit.
The Increasing Trend In Smartphone Ownership
Studies have shown that the number of smartphone users is growing rapidly with 4 out of 10 currently owning a smartphone. This trend is not going to stop anytime soon. With an increase in smartphone users, the number of mobile payments will increase as well.
Unlike first world countries, mobile saturation has not reached third world countries yet. Many rural parts of the world still do not have access to basic internet also. When these consumers get access to mobile wallet technology, they will use it accordingly and create better opportunities.
Major Challenges For Mobile Wallets
Lack Of Trust Among Certain Consumers
As mobile payments are conducted online, you cannot totally ignore the cybersecurity threats. In fact, this is one of the main reason why many consumers are reluctant to migrate to this technology.
With mobile wallets comes the danger of vulnerabilities, undetected malware, hacking and leakage of customer data by unscrupulous people. Making the technology safe and secure from these threats is a continuous struggle for mobile wallet service providers.
Research has shown that over 40% of mobile users do not think that mobile wallet payment methods are safe. Moreover, many believe that once they lose their mobiles, they will no be able to make any more payments. In another report by Experian, it was stated that more than 50% of consumers still believe that credit card payments are safer than mobile wallets.
Lack Of Proper Awareness About The Technology
In many countries especially, third world countries, there is a wrong perception about mobile wallets. People still believe that traditional payment methods are more convenient than mobile wallets. Due to this ignorance, they prefer debit and credit card transactions over mobile payments.
Mobile wallet service providers need to invest more in their marketing techniques to address this challenge.
Compliance To Rules And Regulations
The mobile wallet service providers need to follow rules and regulations set up by the legal regulatory bodies. The service providers have to follow regulations which are both consumer based as well as financial based.