The COVID-19 pandemic has brought a drastic change in our lifestyle. One of the examples of change is the surge in the usage of digital wallet solutions. It is expected that the digital wallet transactions will reach $13,979 billion globally by 2022, but the recent growth in the number of wallet-based transactions indicates that this target may be reached earlier.
Technological advancements have made digital wallets more robust and secure than ever. In the near future, more advanced features will be integrated to make digital wallets more convenient for people worldwide. If you have a digital wallet app-related idea or you are an entrepreneur who wants to come up with a digital wallet app, then this blog will be helpful to you as we cover the five most prevalent digital wallet trends of the year 2020 and beyond.
Top Five Digital Wallet Trends Set to Dominate in 2020
- Cryptocurrency Wallets
After the unprecedented rise in the year 2017, most cryptocurrencies were crashed in January 2018. However, this sudden rise and fall in cryptocurrencies have drawn the attention of many people across the world. Today, startups and SMEs have widely adopted the cryptocurrency and many people tend to accept or send payment through bitcoins or other cryptocurrencies. Statista has revealed that till 2019, we had 42 million cryptocurrency wallet solutions.
As the blockchain technology, parent technology behind the cryptocurrency evolves, the number of cryptocurrency wallets will increase. These wallets eliminate the need for a third-party and thereby ensuring the users to get a secure online transaction at reduced costs. Startups find these wallets cost-effective, and we can expect that their demand will increase in the future.
What’s more, the 5G technology is about to come in the year 2020-2021. As this technology will make the Internet lightning-fast, many new players will come up with the cryptocurrency wallet solutions that have innovative features.
- NFC (Near-field Communication) Payments
The UK is the biggest user of NFC payments. The usage of contactless card transactions has increased a lot in the last five years and reached over 640 million in the year 2019. Google Pay, Apple Pay, and Samsung Pay are some of the known NFC technologies used by contactless digital wallets. Smartphones with NFC functionality can communicate with the NFC card machines.
In contactless payment, most smartphones need not touch the POS device to make the payment. Only close proximity from the device or terminal is sufficient to make the payment. In recent years, the NFC technology has gained a lot of ground in the corporate sector and among people alike. It is fair to mention that the NFC-based digital wallet solution development will thrive in the near future as entrepreneurs will consider it an excellent investment.
- AI-based Digital Wallet
Artificial Intelligence (AI) and Machine Learning (ML) can work wonders in digital payment. As one of the most promising technologies, AI can make the digital payment experience more pleasant through chatbots. Many people have different questions and confusion regarding digital wallets. The major reason for people’s dilemma is the digital wallet app needs confidential financial data and its users hesitate to give such information.
Here, AI-powered chatbots come into the picture. All major financial companies, banks, and eCommerce companies use such chatbots in their apps to address their customers’ queries and concerns. AI-based chatbots can also execute basic transactions in the digital wallet apps on getting the user’s approval. In the coming years, AI-powered digital wallets will bring automation and enhance the convenience of the users. For example, AI can follow voice instructions and execute transactions automatically.
Routine payment tasks including number verification or ACH payment processing can be done successfully through an AI-based digital wallet application.
- Smart Speaker-based Payments
Smart speakers have gained a lot of popularity since Amazon launched the first smart speaker named Amazon Echo in the year 2014. Google and Apple followed suit in the year 2016 and 2017 respectively. These smart speakers have contributed to mainstream the home automation concept. There is no exaggeration in mentioning that smart speakers can effectively control home automation. In a couple of years, many users have used voice assistants to make direct payments.
As the number of online payments is increasing, the number of online transactions using smart speakers is also rising. Users find voice assistants very convenient and secure way to send and receive money. As smart speaker technology will become more popular, we can expect that in the coming years, the smart speaker-based digital payment solutions will be prevalent.
The US has already shown the signs of the promising future of smart speakers. BI has predicted that the smart speaker’s use for online payment will increase to 77.9 million users by the end of 2022 in the US alone.
- Sound Waves-based Payments
We can consider this as the most advanced way of online payment. The reason is simple- this technology enables users to execute any transactions without an active Internet connection. The digital wallet solution can leverage sound waves across most of the smartphones. The sound wave-based transactions carry encrypted payment data. Here, the sound waves can carry encrypted data.
The sound wave technology is in demand for many reasons. First of all, this technology needs specific software and unlike NFC, it is not necessary to integrate it into the smartphone. Also, there is no need for additional hardware to use this technology. In a way, sound wave-based technology can make online payment simple, cost-effective, and secure. All such benefits make this technology a futuristic option for digital payment.
Though digital payments face various challenges including compliance to prevalent standards, authentication, and security, evolving technology can help the mobile app development company to build a secure and reliable digital wallet application.
Digital wallet solutions have made online transactions more secure and convenient. More people have started using digital wallets or eWallets these days, and soon, digital payment will largely replace the traditional cash-based mode of payment. It is interesting to see how these trends will take the digital wallet applications to the next level in the year 2020.
Jamie Joyner is a content cum digital marketer at Solution Analysts, a leading Android application development company. She is an avid reader and likes to remain updated for technological advancements in the domains of web, mobility, IoT, and emerging technologies. Her articles are informative and interesting at the same time as he expresses insightful thoughts clearly.