FinTech companies have started to fire up the mobile payments market. In recent years, the FinTech industry has not only attracted attention of traditional financial institutions and disrupted sectors such as banks, but also has made an important transformation in consumers’ mindset who now values their finances and management. The expectations of the customers have been raised. FinTech has actually ‘spoiled’ the customers by making them ease-lovers

In today’s time, one cannot imagine not having an option to make a mobile payment as there are lots of options to choose from, which makes it even harder.

In 2016 total mobile payment transactions reached about  $27.05 billion, with users spending an average of $721.47 annually.

Almost every other month a tech giant introduces its user-friendly mobile wallet or other integrated payment solutions.

 

What are mobile wallets?

Mobile or digital wallets are applications or services that allow the user to make money payments and transfers with the phone.

 

Functions:

• Pay with existing banks or credit cards
• Education payments (payment of tuition or university fees)
• Shopping
• Booking tickets and accommodation
• Ordering food
• Purchasing financial products (g., life insurance)
• Bill payment (g., internet, gas, water, TV
• Website payment option
• Buy goods (tickets for movie etc.)
• Buying apps and digital goods
• Recharge talk or data mobile minutes
• Micro-finance loans for entrepreneurs
• Peer to peer payments and transfers
• Direct deposit from an employer

 

 

Benefits:

• Many people don’t have easy access to banks or debit/credit cards.
• Mobile Phone usage is increasing fast.
• Companies give offers of recharging talk minutes and internet data with digital wallets.
• It’s low cost for businesses to accept They don’t need any special equipment other than their normal smartphone.
• People do not want to carry cash in some countries with dangerous conditions such as street crime.
• Some digital wallets also give their users incentives such as a discount on movie ticket or restaurant meal if the make the payment with a certain digital wallet or payment provider.
• It’s easy and cheap to transfer money between family and friends.

 

 

Security with mobile wallets:

• Password protection
• No card stealing
• Fingerprint scanning
• Fraud monitoring
• No credit card to swipe

 

 

Where are mobile wallets most popular and why?

1. India

• Not a lot of people have bank accounts
• Mobile wallets provide deals that are not offered by credit cards
• Recharging talk and data minutes

 

2. China

50% of mobile transactions are from Alibaba Alipay.

 

3. Africa

• Only a few people have bank accounts.
• Very dangerous to carry cash in this country.
• 80% of the people have access to mobile phones.

 

Top mobile wallets and payments (country-wise):

US

• Square
• Android Pay
• Venmo
• Paypal
• Dwolla

 

Japan

• NTT Docomo
• Linepay

 

Russia

• Yandex money
• Visa Qiwi wallet

 

Europe

• Paypal
• Zapp
• Android pay
• Samsung pay
• Apple pay

 

Africa

• m-peso

China

• Alipay

 

 

Singapore

• Samsung pay
• Apple pay

 

South Korea

• pay
• N-pay
• Kakao pay
• Android pay
• Samsung pay
• Apple pay

 

India

• Paytm
• Airtel
• Oxygen
• Mobikwik

This demonstrates the level of concentration of similar services in the world.

 

 

Technologies that work behind a digital wallet application:

1.     Online payments:

This feature is most important in a digital wallet app. The app would require to be connected with the third-party payment APIs, e.g., Authorize.net or Braintree so that the users can make payments through the wallet.

2.     Person-to-person payments:

The app allows two users to send and receive money to each other. APIs from Stripe and Braintree are mostly used by mobile app development companies to enable peer-to-peer payment functionality in the app.

3. Point-of-sale integration:

Most of the modern day digital wallet apps enable cross-platform payments. The app makes it possible for the users to make contactless payments through their wallet app with the help of technologies such as RFID and NFC.

4.     QR codes:

QR code method has become a popular detector of an item. This technology promotes cashless and card-less payments economy.

 

 

Security risks and protection:

Virtual mobile payment method seems really convenient, but they aren’t as safe as a physical payment method. It is extremely important to know about threats to protect your funds. Big money means big risks. So, the security of mobile transactions is even more vital for traders, investors, and gamers. Here are some suggestions on how to protect your transactions:

Update apps frequently: Keep your apps updated to protect your funds from actual threats as the hackers keep on implementing new algorithms.

Install only verified apps:  Download apps only from trusted sources that should be checked by iTunes or Google Store.

Connect to protected networks: Don’t input private data via public Wi-Fi. Rather use a cellular network or a secured home system.

Be sure that transactions are secured: It is better to authenticate data with a fingerprint scan or one-time code or at least use a unique username and a password.

Check your account and reports: Keep an eye on your transfers, requests, and settings. Also, change passwords regularly.

 

Great future growth for mobile wallets:

It is expected that in the next 10 years, the number of mobile users will reach up to 6.1 billion that makes 70% of the world’s population. The pressure on banks is increasing due to the myriad services provided by technologies such as mobile wallets.

One can expect the future filled with technological use in terms of payments as it is more convenient, quick and feasible.

You have your banks in your hands now!