Digital wallets remain one of the most remarkable discoveries in the fintech industry. Offering an easy and quick payment process, the fame of digital wallets has been undeniably significant for the past few years.
Simply put, digital wallets are fintech products and a payment method that offers a cashless experience for individuals. Users can save money in their mobile app and use it for online and offline transactions.
As digital wallets keep gaining popularity, more brands are entering the market and offering exclusive features and benefits. Discover the six digital wallet trends and how they will affect our financial journey in 2023. Keep reading!
How is Digital Wallet in 2023?
It’s safe to say that the popularity of digital wallets will keep on the rise for some years ahead. A study reveals that digital wallet users will double between 2020 and 2025. In addition, there were transactions worth $5.8 made through digital wallets in 2021.
The advancement of AI tools will help digital wallet brands enhance their services. There will be more users as cashless payments with digital devices become favorable, especially among younger age groups.
Along with some growing names in the fintech industry like Google Pay, Apple Pay, and AliPay, new digital wallet providers like Wallet Factory are taking the stage. Although each eWallet has its exclusivity, they also share some basic features, which include:
- Easy registration and login
- Layers of protections
- Provide customers rewards
- Integration with debit or credit cards
- Virtual cash storage
Today, many online/offline stores and eCommerce platforms offer payment via digital wallets. They even provide explainer videos to educate users. It’s a way to improve their service and stay relevant in today’s digital society.
Please read our most recent digital wallets case studies.
6 Trends of Digital Wallets in 2023
As digital wallet brands keep developing new features, 2023 will remain competitive for them. But what would be the next trend for digital wallets?
Let’s delve deeper into the main discussions. Below, we’ve compiled the six trends that will soar throughout the year and, perhaps, in the future.
#1. Crypto Wallets
Despite highly fluctuating, cryptocurrencies have become a trendsetter in a digital society. More and more people and businesses use Bitcoin, Ethereum, etc., as a means of transaction and investment.
Following their fame, many crypto wallets are rising in the market. They assist users in transacting and investing safely. The number of cryptocurrency wallet users significantly grew from 6.7 million in Q1 of 2016 to 34.6 million in Q1 of 2019.
Using e-wallets to purchase digital currencies is a convenient way to begin investing in cryptocurrency. However, having a digital wallet to store the digital currency purchased is essential.
#2. Smart Voice/Speakers Payment
Since Alexa, Siri, and Cortana became part of everyday life, there have been discussions about their potential use in payment. Almost 50% (over 126 million adults) of U.S. consumers use voice assistance at least once a month.
Amazon was among the first to introduce a smart voice wallet to its customers until Google and Apple did the same. Voice assistants have greatly helped individuals make purchases and send or receive money.
The increasing trend of shopping through smart speakers will likely result in a further rise in digital wallet usage. People tend to be more at ease using voice commands for making smaller payments, such as purchasing groceries, paying bills, and paying for public transportation.
#3. Biometric Authentication
Biometric authentication can add extra layers of protection to users’ assets in their digital wallets. Many digital wallets incorporate biometric authentication to enhance security and prevent cyber crimes.
Without a top-tier security system, digital wallets are prone to data theft and misuse. Biometric verification will secure sensitive data stored in the user’s wallet, frequently used in online transactions.
For example, users need personal data when purchasing products or booking travel accommodations. Some common ways of biometric verifications are:
- Fingerprint scan
- Palm scan
- Retina recognition
- Facial recognition
#4. Virtual Cards
Odds are, virtual cards will likely be a part of the digital wallet’s main feature. It may vary in two different ways. Digital wallets may come with their exclusive virtual cards or allow users to incorporate credit cards or debit cards.
To use a virtual card, you need to add funds to it. It works similarly to physical cards, but you use mobile devices to progress any transaction with it. You must also input a 16-digit card number, CCV security code, and expiration date.
One specific digital wallet trend we expect to keep surging in 2023 is the buy-now-pay-later (BNPL) service. A study reveals that inflation issues are one of the reasons BNPL is getting even more popular.
Another related study predicts that the BNPL will result in 300 billion worth of transactions. The number will likely keep growing to 576 billion in 2026. Moreover, grocery shopping is the most significant spending for BNPL transactions.
BNPL offers a new experience for purchasing products. Customers can buy the products they want with installment payments. Better still, this type of installment is commonly free of interest and provides payment period options.
#6. Social Commerce
Social media remains a trendsetter today. With millions of active users, social media platforms keep adding new features, including shoppable posts. Social media plays a crucial role in business development, and strategically scheduling targeted social media postings can greatly influence the success of your business. More and more platforms integrate digital wallets as their option method to provide the utmost shopping experience.
Users can connect their digital wallet account to social media and purchase products anytime easily. In fact, a quarter of users use social platforms for shopping. This trend can add $1.298 billion worth of sales from social media.
Digital wallets will stay with us to improve our financial journey in a digitized society. Some of the trends above are a carryover from previous years. However, they may need more enhancement to provide seamless and secure transactions.
In 2023 and beyond, you may not need to carry cash or physical cards when traveling. As digital wallets are accessible through smartphones and mobile devices, you need several clicks to make online and offline payments.