The combined purchasing power and influence of millennials and Gen Z will shape the world of commerce in the future. Businesses must collaborate with financial institutions, fintech companies, and app developers to understand purchasing behaviors and preferred payment methods. These generations are increasingly embracing contactless payments, especially with mobile money solutions that offer frictionless, modern, and optimized experiences.
However, consumers’ expectations from e-wallet solutions are not limited to payments, fund transfers, card issuance, etc. Disruptive technology trends, such as smart payment chips, super apps, virtual reality, and artificial intelligence, have stirred the mobile money system. According to research, globally, the number of digital wallet users will shoot up from 3.4 billion in 2022 to over 5.2 billion in 2026, registering a vigorous growth of over 53%.
Let’s understand the current mobile wallet solutions market, why it matters, and how it will influence the future of mobile money.
The Current Mobile Wallet Landscape: What’s at Stake?
Mobile wallet solutions can transform how people manage every aspect of their daily lives only if the new apps deliver reliability and convenience at scale. Many companies aspire to be the go-to app for all things finance, allowing users to manage cards, make payments, make reservations for travel or restaurants, invest, and sign up for financial products and services. The COVID-19 pandemic accelerated the need for contactless KYC and mobile money solutions.
The strengthening mobile wallet landscape largely affects players involved in financial services, technology providers, the Internet of Things, smart city development, e-commerce, telecom, OTT platforms, social media, etc. These players are looking to leverage their vast user networks, daily touchpoints, brand recognition, and UX expertise to gain quick traction among customers.
Mobile Wallet Trends Set to Dominate the Future
Integration with Smart Wearable Devices
Removable and pre-integrated wearable payment chips ensure a secure and straightforward payment experience. Since the hardware tech is almost invisible, these smart payment chips, tags, and stickers can be deployed easily into any wearables. The experience can be enhanced by integrating payment tags with mobile wallet solutions, which lets users control every aspect of their tags, including activation, deactivation, and keeping tabs on their spending habits.
In recent times, many wearable smart payment projects have emerged to enable contactless payments from not only watches but also from bracelets, rings, phone cases, keychains, and jewelry retailed by well-known brands. In some countries, payment-enabled bracelets have become everyday companions of teenagers, who use technology to control their spending habits with the help of their parents.
The Future of Mobile Wallets is Super
Super apps are the always-open door to the next generation of immersive digital experiences, giving users a contextually relevant experience that spans well beyond a single purpose. The Asia-Pacific region has become a hotbed for this trend, with several e-wallet solutions evolving into super apps, diversifying their offerings into food delivery, taxi-hailing, health tracking, hotel booking, investments, and gaming.
Similarly, super mobile money systems offer a connected ecosystem where users can manage payments, savings, investments, cryptocurrency, budget, insurance, credit/debit cards and more in one place. Cross-selling consumers on everything they need and one-stop shopping will be the dominant fintech strategy for the next decade. It will also be a growing threat to the legacy of single-function financial apps.
Artificial Intelligence Against Mobile Wallet Frauds
Common concerns like identity thefts and stolen phones are easier to model under a supervised learning framework, but it can be difficult to construct risk identification models for illegal transactions resulting from stolen mobile wallet accounts.
Such illegal cash-outs can be tackled easily through AI-powered active learning (AL) and PU (Positive Unlabeled) learning. Even within the same accuracy requirements as baseline models, AL and PU learning returns 3x improvement in the identification rates.
Financial Assistance
Traditional mobile wallet solutions can hold your money but can’t help you identify the best way to manage it. A new generation of fintech startups has already started leveraging AI to help users make smart decisions about their money through interactive and proactive assistants that notify users of discounts at their preferred stores, create custom budgets, seek the best loan rates, etc.
AI-powered robot advisors in mobile wallets or super wallets can utilize a 360-degree view of user data comprising frequented services, money constraints, and spending habits to automate different aspects of money management. Financial assistants integrated into e-wallet solutions can automate asset allocation, portfolio rebalancing, tax-loss harvesting, and more. The next generation of mobile wallets will offer ‘self-driving money’, a feature that reminds users to negotiate loan rates, medical costs, and credit card fees, along with automating savings, investments, and loan approvals.
Mobile Wallets in the Metaverse to Reimagine Money
As the metaverse is becoming an actual arena for enjoying an immersive experience, spending money, and shopping, it will require the support of payment networks. Mobile wallets will be the key component in bringing the metaverse to life. Digital wallet accounts will represent a slice of ownership in any metaverse project.
People will pay each other by exchanging tokens using decentralized finance protocols in the metaverse. However, these tokens won’t be cryptocurrencies. Instead, these tokens will be linked to actual assets stored in mobile wallet solutions, such as dollars, gold, and loyalty points.
Mobile Wallets will Transform Money as we Know it
Since the mobile money system is attracting everyone from independent developers to fintech giants, stiff competition is leading to innovations in mobile wallet solutions that are likely to persist unabated for the upcoming years. Innovations within e-wallet solutions are driven by customers’ demand for personalized, seamless, automated, and one-stop-shop experience while managing all their financial matters. Mobile wallet solutions seem to be the only answer to the finance of the super and virtual future, where virtual markets, digital identity owners, and wallets come together to build a secure and trustworthy financial ecosystem.
Panamax’s MobiFin Mobile Wallet Solution is a new-age, secured, and flexible platform that leverages an API-first approach and omnichannel UX to help you offer unparalleled ease of mobile transactions to your customers.
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