Digital transformation has always carved a way, even amidst chaos. We can say this at least after 2020 when humanity was making a protracted effort to survive a global pandemic, we saw technology thriving. From no physical contact to digital transactions, “contactless” was the word of the year. To quote BPC Banking Technologies, “The industry has never before seen such a drastic change in payment options with the replacement of cash payments to digital media.”
In the post-pandemic world, digital wallets have taken over completely. With major brands and eCommerce businesses encouraging no contact payments, this mode has gained momentum among the masses. And now that even small businesses have started providing digital payment options, it has become easier than ever to travel cashless.
In this article, we will discuss the top digital wallet trends that will rule in 2021. But first, let’s take a look at the concept of digital wallets.
A peek into digital wallets
A digital wallet, also known as an e-wallet, is an online service or software program that lets users make digital transactions safely while storing their transaction data and passwords for various sites. These wallets can be utilized to pay merchants and vendors through smartphones with instant and responsive apps or websites.
Digital wallet trends that will soar high in 2021
Following are the top digital wallet trends that are expected to rule in 2021 and beyond. So dive right in.
1. Biometric Authentication will increase
As the digital wallet is a matter of money and finance, there are bound to be certain risks involved. Every day we hear about financial frauds and account hacks. So security is a big concern and one of the most important factors why people hesitate to adopt online banking and making digital payments. Thanks to biometric authentication, the security issue has been minimized. Biometric technology makes use of fingerprint scanning, facial recognition, heartbeat analysis, etc instead of passwords and are unique for every user. As per reports by Biometric Update.com, it is estimated that approximately 2.5 million biometric payment cards will be issued in 2021. This figure shows that the future of digital payments is quite safe.
2. AI and ML to the rescue
Artificial intelligence and machine learning play a major role in technology today. Integration of both these software with digital wallets will help prevent any cyber frauds and theft. Not just that, these technologies will also be helpful in detecting and threats to the system. As per a report by PaymentsSource, different banks have already started investing in AI and ML models and the estimated investment is said to be $217 billion. This is evident enough that AI and ML will be key players in fraud prevention in the coming years.
3. More usage of QR codes
Every day we carry out so many online transactions and sometimes it feels uneasy to give out your contact number to strangers. But the QR codes have made life so easy. These are unique codes that you just have to show and the other person simply scans and transfers the money. This process also reduces any scope of error that otherwise may occur while typing a number on your phone. Not to mention, these QR codes are safe, inexpensive, and easy to scan and can be used by anyone.
4. The rise in Voice-activated payments
Besides biometrics, smart voice payment is another trend that is gaining popularity after major brands like Amazon, Google, and Apple adopted it. We might see more apps being integrated with the phone’s voice AI or even come with their own enabled voice payments.
5. NFC based payments to gain momentum
In the last few years, we also saw a rise in transactions where you could make a payment by just tapping your card. This technology is powered by NFC or Near Field Communication. This NFC transaction is way faster because NFC transfers the encrypted data to the point-of-sale device instantly. The NFC technology is said to be replacing the traditional PIN codes in the near future. In fact, UK Finance has predicted that by 2027, 36% of all payments will be made via NFC-enabled contactless cards.
6. More cloud dependency
Cloud dependency is in every area of digitalization. Even in e-wallets where late payments can cause problems for the users, it is likely for companies to integrate more of their digital wallets with the cloud. One of the biggest problems that occur in online transactions is the issue of late payments. This can be reduced by the network of remote servers.
Summing it up
Quite evidently, Digital wallet trends are here to stay. In the year 2020, we have seen people being quite used to paying digitally and staying “contactless”. It is also a way to stay safe from online thefts and robberies. And with so many digital wallet apps gaining popularity, the future sure looks cashless!
If you’re planning to develop an app with a digital wallet make sure you go through all the trends and technologies. You can also contact us for mobile app development services. Applify has a team of 100 plus professionals who will help you build your custom digital wallet app.