Mobile wallets remove many pain points from the everyday transaction process. Housing both payment-related credentials (such as credit card and bank account details) as well as non-payment-related information (such as loyalty cards or ticket information), mobile wallets provide a simple way to manage payments, track transactions, participate in loyalty programs, and most importantly, replace the need to carry around bulky plastic cards.
A few operating system-specific mobile wallets such as Apple Pay, Samsung Pay, and Android Pay, have already gained widespread usage around the world. But now, brand-specific wallet apps, such as Walmart Pay and the Starbucks wallet app, are on the rise and experiencing significant user growth. What’s more, digital wallets are being used a gateway for all interactions on the blockchain as well. Digital wallets offer consumers a way to store, trade, and manage both fiat money and virtual assets, such as cryptocurrencies, just as they would with a traditional exchange or bank account.
While information security concerns are still the biggest obstacle for the mass adoption of mobile wallets, wallet services are increasingly incorporating encryption and tokenization technology to provide consumers with faster, cheaper, and more secure transactions.
As mobile wallet usage continues to rise worldwide, here’s a look at a few of the biggest trends to watch for in the coming year.
Mobile wallets will become more than just a place to store funds
While the core purpose of a mobile wallet is to store and manage funds, wallet providers are increasingly adding features that allow users to do more with their money, such as perform trades and exchanges.
For cryptocurrency holders, rates fluctuate constantly. Therefore, more and more wallet apps will turn to features that allow users to track prices and conversion rates in real-time. With built-in charts and graphics, wallet users will be able to visualize any changes and even receive automated recommendations on when and where to invest. What’s more, many mobile wallets will begin offering collateral services. For instance, a handful of wallet services are venturing into microcredit services, cash pick-ups, and hyper-local transactions.
Mobile wallet market consolidation
The current mobile wallet market is highly competitive and fragmented, making mass adoption challenging to achieve. Fortunately, with an uptick in acquisitions in the mobile wallet space this year, there is increasing proof that consolidation is well underway. In 2019, it’s likely that a few top players will emerge, acquiring or eliminating rival mobile wallets along the way.
Mobile wallets will start replacing exchanges
There was no shortage of cryptocurrency exchange hacks in 2018, and as we move into 2019, digital wallets will become a popular alternative to avoid hacks and information leaks. Of course, no mobile wallet is entirely immune to an attack, but more is being done by wallet app developers to protect user data.
Many wallet apps are taking significant strides to reduce the risk of security breaches by adding more personal layers of security, such as addition pin-codes, two-factor authentication, etc.
More loyalty programs will move to mobile wallets
The average consumer participates in loyalty programs all the time, whether it’s with an airline or a local coffee shop, to collect discounts and other offers. In 2019, more and more businesses will shift to wallet app-based loyalty systems that allow customers to accumulate loyalty points in the form of digital currencies, which can then be exchanged for a variety of offers.
For instance, through a mobile wallet, airlines can allow customers to collect digital currency which can be spent with partner hotels, car rental services, and more.
The future of mobile wallets
According to a new study from Juniper Research, nearly 2.1 billion consumers worldwide will use a mobile wallet to make a payment or send money in 2019. Consumer concerns regarding information privacy and security on mobile wallets are subsiding, primarily because blockchain-based wallets are making it easier and more secure for consumers to perform transactions at any time, in any currency, and with any person or business. The mobile wallet space will continue to experience explosive growth in 2019, especially as mobile device penetration continues around the world and leading industry players continue to improve their services and consolidate the market.