Over the years, the FinTech industry has seen consistent innovations that not only make it fit for present-day users but also makes it a lot easier to access traditional services that once required a bank visit. This FinTech Era has brought to consumers real-time 24/7 access to financial services via mobile banking, digital wallets and virtual cards. As the fintech industry grows, some of these services – mobile banking, digital wallets – have branched out.
In this article, we will be looking at digital wallets, what it means and it’s growth globally. Along with that, how the growth of digital payments is synchronous with digital wallets and incentives that digital wallets lucrative.
First, what are digital wallets? According to Investopedia, – A digital wallet is a system that securely stores users’ payment information and passwords for numerous payment methods and websites. Common examples include Apple Pay, Google Pay, Samsung Pay, and PayPal. These platforms are been used to a great extent across the world.
The growth of digital wallets is not segmented to a part of the world, no! It is a global trend. Millions of mobile users make a transaction every day with their smartphones. In the United States alone, 57 percent of users (which amounts to 60 million people) have used a mobile wallet at least once & as of 2016, PayPal has 600 000 users in Sub-Saharan Africa.
A key reason behind the rampant growth of digital wallets across the world is the ability to have one platform that makes all your transactions easier and faster as you don’t need to input your details every single time. Because of the quick transaction facility that digital wallets allow, it has been able to become of one the most used element of the FinTech Industry.
The rise in digital transactions is then another trigger issue which has resulted in the growth of digital wallets. Capgemini’s World Payments Report 2018 reveals that within 2015– 2016 the volumes of non-cash transactions have touched 482.6 billion and are expected to develop by 12.7% by 2021. Digital payments as an industry are anticipated to grow at a yearly rate of 18% between 2018 – 2023.
Of cause, there are difficulties in the adoption of digital wallets. Most grown-up customers have not fully adopted digital payment practices, and changing from a traditional purse to a digital one will take some time. A lot of consumers have still not seen the need to change their payment behaviors, although most people would be inclined to switch if the new payment method would shorten the checkout procedure and if offered incentives as research has shown that discounts, rewards, and coupons could get customers to switch their payment type over to mobile wallets.
Written by Steve Onwuka | Community Manager at Korapay
Korapay is a cross border remittance platform focused on reducing the cost of money transfer and increasing its speed into and within Africa. Korapay allows individuals in the United States to send money within minutes to the bank account of anyone in Nigeria.