Why Mobile Wallet App Startups Fail?
Digitization has taken money transactions to another level, wherein mobile wallets have taken away the need to carry cash or credit/debit cards. It’s better, really. Just scan the QR code and pay. This has led to businesses coming up with newer and better ideas to create mobile wallet apps to make life easier for their users. However, most new mobile wallet startups end up failing. Why? Let’s find out.
First of all, we need to understand the difference between a mobile payment app and a mobile wallet app.
Payment App vs Mobile App Wallet App
A mobile payment app offers online payment services within itself and has a 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 would one choose a wallet app over a direct payment app? The answer is simple:
- More offers and shopping portal accessibility.
- One can shop at various stores, both online and offline, to reduce the number of places the card details are stored.
- The wallet does not disclose the card number, thereby greatly reducing the chances of online fraud.
- You can always redeem cashback and various other rewards when you use your card from a mobile wallet app for payment towards any distant portal.
- Also, most e-wallets have their personalized reward schemes where one can shop for extra discounts and more added benefits.
Now despite these benefits, why are so many startups failing? Why are most mobile wallet startups not able to keep pace with the existing ones?
Maybe these startups are lagging behind because of improper e-wallet app development. Well, let’s not shoot in the dark. Here are a few valid reasons:
It depends upon the end-user, what their behavior is like and how they want their payments to be done. Would the user prefer to shop on these portals instead of going to the showrooms of the top brands out there? Humans don’t embrace change easy. It’ll be some time before we started trusting the web with our shopping needs so much.
Different methods of payment
At one point in time, there was a worldwide accepted method of payment known as NFC (near field communication). It didn’t turn out to be very successful. The reason was the unacceptance by merchants and the requirement of additional hardware settings that weren’t easily accessible. No one was ready to go out of their league to adopt a newer, though easier method of payment.
Risk of investment
In the case of NFC, most merchants chose not to put their money into such terminal hardware unless there is enough return from the customer’s side. The same goes for startups that fail in terms of e-wallets. They fail to understand the customer and merchant base and thus fail to create or facilitate seamless transactions between them. Failing to understand the psychology of the target audience is the biggest reason behind the failure of such startups.
Availability of options
Other reasons include the choices that are available to the customers; they have a variety to choose from when it comes to various offers and discount schemes. This holds true for every industry. The competition and the stakes are already high. A mobile wallet startup should learn how to cope with this.
Another major reason is the security threat and the lack of trust people have in relatively newer apps. Most people aren’t very comfortable sharing card details with a new e-wallet. Thus, these apps have to work towards better encryption and safety methods like 6-digit pin locks, fingerprint unlocking, etc. There have been multiple incidences of bank frauds and money deductions from customer wallets and the money being stuck in various processes.
If you wish to excel in this field, it is extremely necessary to put the security of the data of your customers into the top priority list. There is a lot of sensitive information, which if leaked, will cause a lot of issues. See what you can do differently, yet efficiently like most successful e-wallet apps, such as Square, M-PESA, AliPay, etc., to give an overall satisfactory experience to your target user base. And as usual, stay tuned with AppMystery for your daily dose of information.
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