Although it may feel like digital wallets are a new kid on the tech block, they’ve been around since the 90s. The first signs of the digital wallet revolution date back to PayPal being used as a software solution for eBay users, that made it convenient to store their cards for online purchases.
Technology keeps surprising us with the pace at which it changes and becomes the norm. Whereas necessity used to be the mother of invention, arguably, it’s now convenience that hails the best new tech.
It would be fair to say that digital wallet technology has had its difficulties. Customers and retailers were slower than expected to adopt. This is mainly owing to security concerns and a lack of awareness. Despite the early launch and success of PayPal, it wasn’t until 2014 that the use of digital wallets really soared.
Digital wallets are here to stay
There can be little doubt that digital wallets and online payment systems are here to stay. Cash is increasingly old fashioned, hard to track and physically costly to produce. The current trend suggests that cash will become a thing of the past by the mid-2020s.
The instant gratification generation
We now live in a world that moves faster than ever before. Digital wallets reflect the wants and needs of a generation accustomed to instant gratification. It’s easy to imagine that digital wallets would fail in the dial-up modem world of yesterday, because if you’re going to wait minutes for a connection, you may as well go to the bank.
Studies show that people value digital wallets for:
- Convenience and flexibility: It’s accessible, it’s quick and as usage grows, so do the number of places you can touch and go.
- Track Spending: More than ever before people are keeping an eye on their balance sheets
- Loyalty, offers, rewards: Having your money, and spending working harder.
- Engagement: Millennials in particular want interaction with their online lives. In an Urban Airship study, 67 percent of respondents said they wanted their mobile wallets to offer loyalty cards, and 62 percent said they wanted coupons.
- Payback and lending: Instant transfers take the awkwardness out of those money conversations. Splitting bills, helping out a friend or building a kitty have been made MuchBetter by digital wallets.
The youth take the lead
Millennials have adopted digital wallet tech and they’re running with it. Younger consumers have fewer apprehensions, and a better understanding of online security and how that technology has advanced. Whereas older consumers are still wary of sharing details online. As companies like MuchBetter introduce ever more advanced security features, the expansion of digital wallets will cross those generational barriers and become as ubiquitous as the smartphone.
Globally digital wallets are taking off. Israel, Norway, Denmark and Turkey are the biggest users of mobile wallets. 1 in 10 transactions In the UK are now contactless and all POS terminals in the UK and Ireland are likely be contactless by 2020. 53% of Australians use contactless one a week. 10% of domestic Canadian transactions are contactless. And in India the industry is projected to become a 6.6 billion dollar industry by 2020. It’s hard to imagine a world where cash can keep up with that.
Challenges to adoption
However there is always room for improvement. Many people who download digital wallets fail to consistently use them. Traditional banks are catching up by offering apps and account interactivity to try and keep customers. And there are still limits to the availability and ease of use for contactless. Thankfully apps like MuchBetter are leading the way in ease of use, and high level security tech that’s paving the way for a bright future of digital wallets.
With MuchBetter we make paying for life’s costs so much more rewarding. Keep track of your finances using our app, send money to your friends and family instantly and get rewards from it all. Join the masses and start being a MuchBetter person today. Download the app today to sign up and receive a free pre-paid Mastercard.