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Benefits of Using Mobile Wallets

Mobile Wallet Apps - The New Way of Banking

A recent report by Zion Market Research estimates the value of the global mobile wallet market at approximately USD 594.00 billion in 2016. This is expected to swell to approximately USD 3,142.17 billion by 2022, recording a CAGR of around 32% between 2017 and 2022. The growth of mobile phones has traced the worldwide adoption of smartphones. Here we decipher certain basics around this technology.

What is a Mobile Wallet?

A mobile wallet is a type of payment service by which one can send and receive money via mobile devices. Simply put, it is the digital equivalent of a physical wallet. It's a virtual wallet, where you preload a certain amount and spend it at merchants listed with the mobile wallet service provider. Alternately you can add your debit or credit card information to the mobile wallet, accessing it at the point of purchase.

How Do Mobile Wallets Work?

Most mobile wallets work through an app on your smartphone. You can then use this at the point of purchase by either scanning a barcode, tapping or waving the phone. This transmits the payment information and you would be required to verify the purchase by using either a code, a pattern, etc.

Are they safe?

It is widely believed that mobile wallets are much safer than using cash carried in your physical wallet. Mobile wallets use encryption technology that protects your data at the time of making payments. This makes intercepting this data complex given the layer of security involved. In the case of a loss of one’s phone, most mobile wallets offer an option to disable the service through your online account.

Mobile wallets offers an ease and convenience besides enhanced security. As economies world over stress on a move towards being cashless, the use of mobile wallets is bound to increase in the coming months and years. India is a case in point where the mobile wallet has made rapid strides. One of the foremost players within the Indian markets is Paytm. The Paytm Wallet application enables one to book air tickets and taxis, mobile recharge, and payment of DTH, broadband and electricity bills among others. It also has a money transfer feature.

The UAE is expected to see the rollout of some major mobile wallets in the coming months. Currently functioning wallets include Samsung Pay and Apple Pay amongst a few others. One keenly awaited wallet in the region is the Emirates Digital Wallet. Supporting the UAE’s smart government initiative, this wallet is expected to enable payments and money transfers using smartphones and other handheld devices. The app will be accepted everywhere in the UAE, comprising of over 45,000 merchants and other service providers currently operating more than 120,000 POS terminals.

Content exclusive to Citi by Wealth Monitor. The views expressed here are those of the authors and do not necessarily represent or reflect the views of Citibank UAE. The information in this website does not constitute investment advice or an offer to invest or to provide management services and is subject to amendment without notice.