As with many of today’s digital finance solutions, e-wallet development services have taken the world by storm. Accessed through either a smartphone or computer, e-wallets involve a mix of payment acceptance gateways and high-security storage that are applied to complete online transactions. They essentially work the same way as a credit or debit card but, rather than the physical card, e-wallets are entirely digital and make it no longer necessary to carry a wallet.
But for anyone trying to enter the market, from big banks to FinTech startups, how does the business model work? More or less, it depends on type of e-wallets chosen, and these fall into three main types:
- Open wallet: This is a simple and secure model recognized at most shops and online marketplaces, similar to Mastercard or Visa, usually created by banks or companies partnered with banks. It offers a number of convenient features to customers like simplified online purchases, contactless in-store payments and withdrawing cash at physical locations such as ATMs.
- Semi-closed wallet: For both customers and retailers, this e-wallet type offers a bit less flexibility by only allowing users to complete transactions at pre-identified locations and stores, like PayPal. This web platform has a built-in centralized storage of e-money that’s accepted for both online and offline purchases. As a result, these platforms have a type of e-money license and can release this e-money into virtual wallets that are centrally managed by PayPal.
- Closed wallet applications: This e-wallet stores funds for users and allows transactions exclusively with the issuer of the wallet, such as Amazon Pay. Any money from cancellations, refunds or returns is likewise exchanged and stored in the wallet. Businesses that sell products and/or services have the best opportunities with a closed wallet app, with some companies able to earn a small interest on the money within the wallet.
While identifying the best e-wallet model is an important launch-off point, there are other key factors when developing successful digital wallet solutions. These are discussed at length in an action-packed episode of Shine: a podcast by Star where FinTech experts from Star and ZenGo look at why UX, onboarding and security should always be considered for any e-wallet design process. Whatever stage you’re at, don’t forget to perform enough market research and use this to establish a strong foundation for future growth.
E-wallets: a user-centric model for banks
Now, let’s look at e-wallet development from a user experience angle. There’s a big reason why user adoption has grown so quickly worldwide: it has streamlined once-difficult financial tasks with top-notch customer service programmed into the e-wallet app. For those out there that still need convincing, let’s look at these reasons why e-wallet technology brings enhanced customer service offerings:
- No more visiting banks. This increased level of convenience is a main driver for customers flocking to e-wallet apps. Thanks to internet connectivity, e-wallets have all but eliminated the requirement for physical banks and enterprises in order for customers to open and maintain bank accounts. Instead, all of this can be organized quickly from the comfort of one’s home.
- Digital wallets process transactions immediately. Either with embedded payment options online or at physical stores, e-wallets speed up transactions and allow merchants to process and accept them instantly, which reduces any headaches or wait time, and ultimately delivering better customer service. In a digital world where time is one of the most valuable resources, offering a streamlined and flawless transaction in seconds can be a deciding factor when gaining a customer’s trust.
- To infinity and beyond. A huge draw for many customers is that they can open as many accounts as needed. Doesn’t matter if it’s for personal, business, shared organization, or family, e-wallet apps allow users to continuously open and close accounts based on their needs.
- E-wallets connect customers with your brand. Digital wallets and the ensuing mobile payment solutions are one of the best ways to make consumers feel more empowered during the decision buying process and connecting customers more with your brand. How best to identify this link often comes through personalized FinTech consulting services, which helps find a way to create a payment experience that simultaneously builds strong customer loyalty.
End-to-end product development for FinTech success
Getting ready for the ever-evolving FinTech ecosystem starts with a collaborative and universal approach. With cross-sector experts spanning the globe, Star consultancy brings industry-leading product development with a 40% faster delivery time that launches your FinTech solution, always API-first and user-driven, when it matters most.
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