Alexis Zukierman is the Business Development Manager at Intive, a global digital software and design company that accelerates digital transformation for products and services. Alexis shares his insight and knowledge of digital wallets and how providers can utilize this tool to gain a competitive advantage.
In this age of COVID-19, minimizing physical touch and proximity to others in public spaces is at the forefront of everyone’s mind. By allowing users to go cashless while making in-store purchases, e-wallets significantly reduce the amount of physical contact and subsequently bring down the risk of spreading the virus.
The Emerging Payments Association has recognized this trend in its latest report report which predicts a rise in the use of e-wallets for both online and in-store purchases.
Business Development Manager, Intive
As people turn to e-wallets to address safety concerns, they discover the many benefits that come with using digital payment methods: It’s faster, safer, and more convenient when you can make all of your purchases from one digital location. Not to mention, e-wallets are safer and more secure than carrying around cash or credit or debit cards.
Worldwide, China leads the way when it comes to adoption of the digital wallet with 81% of Chinese smartphone owners using digital wallets. The number of Europeans saying they used a digital wallet is 68% of Europeans. In the U.S., the number of digital wallet users are rising steadily.
While millennials were the initial target user of e-wallets, 48%of 18–34-year-olds had a mobile wallet according to a 2018 report, users from older age groups and with less technical know-how are jumping on the trend and realizing its benefits. Digital wallet providers will now need to adapt and cater to its new, unexpected consumer segments.
Thanks to their convenience, simplicity of use, and the ways in which they promote safety during the pandemic, e-wallets have made a strong mark on the payment’s ecosystem.
As the trend continues to grow and adoption spreads into new segments, e-wallet products will have to take extra measures to gain a competitive advantage and the trust of new users. This will mean prioritizing user experience and improving integration capabilities. Here’s why e-wallets are having their moment and what they should do to stay ahead in the market.
The key to a competitive advantage
If digital wallets are to reach the maximum of potential users, many of whom aren’t particularly experienced with digital products, they must make sure to prioritize simple yet seamless user experience.
Initially, e-wallet designers should remember the importance of a straightforward onboarding and initial set-up. If this is more than a few simple steps and takes the user what they consider to be too long to kick off, e-wallets run the risk of the user leaving the app before they’ve even started.
Other ways of ensuring a user-friendly experience include displaying steps one at a time so as not to overwhelm the user, showing simplified activity icons in the home screen, and having confirmation messages pop up when an action is completed.
It should be easy for new users to create an account without additional or hidden fees (something traditional finance often fails on), and straightforward for them to view all of their transactions and activities within the wallet. The app users of today demand seamless user experience, and any products that neglect to prioritize this risk falling by the wayside.
Many apps are also embracing new innovations and incorporating biometric authentication to add another layer of security, such as fingerprint and facial recognition-enabled log in. Leading banks and fintechs across the board are adopting biometric technology to boost security and streamline user experience in the process.
Not only is biometric scanning more secure than password-based authentication, but it allows users to avoid lengthy processes and paperwork when setting up an account. Users can simply scan their faces and IDs with their phone camera to verify their identity.
Integration is vital for a complete product
When it comes to third-party integrations, the more complete the e-wallet, the better a chance it has at becoming a centralized point for the user from which they can conduct all of their transactions. This means that integration with the user’s bank and other digital accounts, such as PayPal, is essential for any e-wallet provider that wants to extend its reach and grow its user segments.
By integrating with other platforms, e-wallets make it easier for users to cross borders and still be able to pay with the same method they’re used to at home. Integrations provide a way for e-wallets to enter new markets and grow their user base as the trend surges on a global scale, especially in Latin America, Africa and Asia. These regions have huge potential for e-wallet growth due to their high portion of unbanked individuals. In Latin America, on average 51% of adults did not have a bank account in 2017.
Ultimately, digital financial products require the trust of their users. If this is not achieved, e-wallets will not be able to ride the current wave of global expansion. By prioritizing seamless user experience design, a secure infrastructure, and third-party integrations, digital wallets will be able to establish user trust and loyalty, while promoting a safe and convenient payment method that’s fit for the current climate.