
A couple of decades ago, the idea of sending or receiving money via a mobile device seemed bizarre. Today, the use of a mobile device for money transfer is not only widely accepted but also turning out to be the norm in our society.
The hassle of always carrying your money, cards and stressing about losing them seems to be a thing of the past. Mobile wallets have become the modern trend of online payment.
A mobile wallet, often referred to as m-wallet, essentially enables an individual to make monetary transactions using a mobile device. Typically, a mobile wallet is delivered through several payment processing models. This usually includes Mobile-based billing, SMS-based transactions, Mobile web payments, Near-field communications (NFC). Regardless of the model used, a mobile wallet service is generally delivered by and in collaboration with mobile service providers and banks.
Evolution
Back in 1997, Coca Cola introduced a few vending machines in Helsinki that allowed consumers to buy their drink through text message. Although small, this innovative use case is still regarded as the first example of mobile wallet and introduced the idea of using mobile devices for transactions. As time went on, mobile devices were used to buy movie tickets, arrange travel, and even order pizza. By 2003, about 95 million cell phone users had made a purchase using their mobile device!
The major players in mobile wallets are Google, Apple and Samsung. Google wallet was launched in 2011, making it the first major company to provide a mobile wallet to market. With the wallet, shoppers could make payments, earn loyalty points and redeem coupons, using a technology known as ‘near field communications’ (NFC). Unfortunately, Google Wallet had its limitations- it was only used on one phone model and was accepted at a few merchants. Notwithstanding, it was nothing short of revolutionary and paved the way for other m-wallets.
In 2012, Apple introduced the Apple’s Passbook, an app that targeted boarding passes, tickets, and coupons instead of actual mobile payments. Two years later, during the launch of iPhone 6, Apple Pay was announced. Although Apple pay service was only available in the US, it is now available in the UK and China.
Some of the biggest advantages of m-wallets include:
• Mobile wallet ensures smooth transfer of payments from one party to another
• It provides a database marketing opportunity to marketers
• Mobile wallet ensures cost savings for the business by ensuring transparency in payments
• Location based services helps businesses in doing customized promotions for their customers
• Running loyalty programs with customers becomes easier with the help of mobile wallets
However, despite these numerous advantages, the mobile wallets seem to fail. Is it the public’s general trust issue or do they fear getting their ‘pockets picked’?
Talking about the Indian scenario in part, we’ve all seen a boom in the usage of mobile wallets in the recent times. There’s no need to carry around cash or anything, just scan and you’re done. In simple words, they were created to ease our lives and they did successfully. There were tons of reasons behind those, digitalization being the topmost. The early mobile wallet apps prospered, at least initially, during these times but does that mean that the new ones are destined to fail? (Is it like engineering forever?) Let’s find out.
Firstly, we need to understand the difference between a mobile payment app and a mobile wallet app. A mobile payment app offers online payment services within itself and has one single task of paying via app to app whereas a mobile wallet is “all your wallet stored inside an app, be it cash, cards or even documents”. So why do people prefer a wallet app over a direct payment app? Here’s why:
1. More offers and shopping portal accessibility.
2. One can shop at various stores, both online and offline to reduce the number of places the card details are stored.
3. The wallet does not disclose or even directly flash the card number and the other encrypted stuff, thus greatly reducing the chances of online fraud and misusing of the details.
4. You can always redeem cash backs and various other rewards when you use your card from a mobile wallet app for payment towards any distant portal.
5. Also, most e-wallets have their personalized reward schemes where one can shop for extra discounts and more added benefits.
Now addressing the elephant in the room, if the mobile wallets have so much to offer, then why are the various startups in this field failing? Why most m-wallets are not able to cope up with the already existing ones? The top reasons include:
1. Risk of investment
The merchants will not invest their money into such terminal hardware unless there is enough return from the customer side. The same goes for the start-ups that fail in terms of m-wallets. They fail to understand the customer and the merchant base and thus fail to create or facilitate the transactions between them. Failing to understand the psychology of the target audience is the biggest reason behind the failure of such start-ups.
2. Existing different methods of payment
There was a worldwide accepted method of payment known as NFC (near field communication). It hasn’t been very successful. The primary reason was the reluctance and unacceptance by the merchants and the requirement of additional hardware settings that weren’t available and bought by most of the customers. No one was ready to go out of their league to adapt for a newer, though debatably easier method of payment.
3. Availability of options
Other reasons include the choices that are available to the customers, they have a variety to choose among the offers and discount schemes that are available in the market. This holds true for every industry. The competition and the stakes are already high; thus, these m-wallet companies have to cope-up with that.
4. End user dependency
How is it supposed to work if it entirely depends on the end user, his behavior is and his preferences of payment methods? Does he really want to shop on these portals rather than the well-established and trusted names already there in the industry? A very honest opinion about humans is that more often than not, we hate to adapt towards an entirely new behavior. It’s hard for us to change.
5. Security and breaching issues
Another major reason is the security threat and the lack of trust people have in the new apps that shoot up in the market. Most people, even the youth, are not very comfortable in sharing the card details to a new m-wallet. Thus, these apps have to work towards the better encryption and safety methods like 6-digit pin locks, fingerprint unlocking among others. There have been multiple incidences of bank frauds and money deductions from the customers’ wallet and the money being stuck in various processes. Mobileappdaily rightly said, “While digitalization has been a blessing for most of us, it has also made our data vulnerable to potential data breaches.”
The Takeaway
If one wishes to excel and stay in this field, it is extremely necessary to make the ‘security of the data of your customers’ a top-most priority. The various needs and wants of the target audience must be identified and their worried addressed. If the recent past is anything to go by, does this mean all m-wallets are destined to fail? Absolutely not! This only means that there are still a lot of things that left to experiment, both with the companies and the crowd that you are targeting while keeping a check on the shortcomings at the same time.



This problem is known as prime factoring, and some implementations of public key cryptography take advantage of this difficulty for computers to solve what the component prime numbers are. Modern cryptography allows us to use randomly chosen, ridiculously gigantic prime numbers that are hard to guess for both humans and computers.


