Mobile Wallets: How They Change the Fintech Landscape

Everything goes digital now, and the way we pay is not an exception. We can see the FinTech domain taking over the traditional (read ‘old-fashioned’) banking, bringing digital payment innovations to life. Take mobile wallets, for example. Having the luxury of making various money transactions at your fingertips can actually change the way we pay. Read on to find ways mobile wallets can disrupt FinTech.

What’s a Mobile Wallet?

Simply speaking, mobile wallets are digital wallets that store your payment card information on your mobile devices: smartphones, tablets or wearables. You might think that mobile and digital wallets are the same, however, there is a slight difference between them: you can access your digital wallet via your computer or mobile device, while your mobile wallet can be accessed through an app on your smartphone. The ecosystem of the mobile wallet allows processing payments, accessing account information and paying for goods and services without a physical wallet.

Using mobile wallets is very easy. In fact, once you use your phone for payments, you can never go back. After you’ve installed a mobile wallet app, all you have to do to make a payment, verify your identity via a security code or biometrics and voila!

Mobile Wallet Statistics

The demand for digital wallets and mobile banking is increasing gradually. Forrester Research states that the mobile payments market will jump to $142 billion by 2019, and to $190 billion by 2021, according to Statista. The main driving factors for mobile payments awareness and adoption are better security, convenience and bigger demand for mobile shopping (mCommerce). The graph below shows the increment of mobile payment transaction volume in the US alone from 2015 to the proximal value in 2021 (in billion US dollars).

Source – Statista

According to Investopedia, Apple Pay, Google Pay and PayPal are the most popular digital wallets used globally.

Scientists predict the rise of contactless payments in Europe to 36% from all payments in 2027. The countries mostly using mobile wallets are China (47%), Norway (42%), the UK (24%) and Japan (20%), according to the Merchant Machine audit.

Types of Mobile Payments

There are many ways mobile payments are carried out: pay per SMS or phone number, QR payments, cloud-based payments, Near Sound Data Transfer (NSDT), Near Field Communication (NFC) and others. Let us take a closer look at the most popular of them:

  • QR (quick response) payments. This method is mostly used for paying retailers. At the check-out, the cashier enters the amount to pay, and the user lets the cashier scan a unique QR code on the mobile device. Once the system identifies the payer, it takes the necessary sum of money from their mobile wallet using a compatible mobile payment app.
  • Payment by phone number. With this type of transaction, users have to operate within a single platform. The payer enters the recipient’s phone number in the platform and transfers the needed amount of money instantly.
  • NFC payments. Near Field Communication is a set of communication protocols that allow a wireless connection between an NFC-enabled device (usually, a smartphone) and a point of sales (POS) terminal. These transactions are highly secure since credit card details aren’t passed to the retailer, but stored in interim tokens instead.
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How Mobile Wallets Change the FinTech Landscape?

Making transactions easier and faster gives way to new challenges and opportunities. Here’s how mobile wallets enhance FinTech.

Mobile Banking

According to a report made by The World Bank 1,7 billion people worldwide still don’t have access to bank accounts. And that’s in 2018! Most unbanked adults live in China (224 million people), India (191 million), Pakistan (99 million) and Nigeria (62,7 million). But mobile banking can help the financially underserved users get banking services remotely, as long as there’s an Internet connection.

Low Fraud Rate

The tokenization we’ve mentioned earlier makes mobile payments more secure than physically swiping the card and/or entering your four-digit secure code. Even if stolen, mobile phones are hard to unlock and access your money. Plus, smartphones are equipped with a wide range of technologies for secure access like Face ID, fingerprint scanner or voice authentication. When a physical wallet gets lost or stolen, there’s no way to track its location and, what’s more, get your money back. Mobile wallets are harder to compromise and hack.

Behavioral Biometrics Authentication

The MarketsAndMarkets report predicts that the Mobile Biometrics Market will grow to $49,33 billion by 2022 (in comparison to $4,03 billion in 2015).

We all know about fingerprint, voice, face and retina authentication, but there’s a (relatively) new kid in town. Behavioral biometrics studies customer experience algorithms with the help of artificial intelligence (AI). Behavior analysis is an excellent solution for secure authentication as it addresses human cognitive patterns. These include:

  • keystroke dynamics. Algorithms compare the speed of the user’s typing, the typical mistakes they make and specific shifts between keys.
  • gait analysis. Algorithms detect if a smartphone is in the right hands by simply analyzing the user’s style of walking.
  • signature verification analysis. Algorithms determine specific design features of the signature to secure the mobile wallet and identify the pseudo-personality in case of stealing.

Peer-to-Peer (P2P) Transactions

This technology allows transferring money in real time quickly and securely. Users have already taken advantage of P2P transactions by paying the utility bills, sharing taxi drives, buying tickets or simply returning the money someone had borrowed you. Mobile wallets make these transactions effortless. All you have to do is launch the app, place your finger against the biometric scanner, type the necessary amount and hit “Send.” All with a single hand while you’re grocery shopping.

Faster Transaction Time

Have you ever wondered how long it takes for the card payment to go through? The answer is approximately 15 seconds. Yes, this does sound quick. But what about mobile payment? They beat the physical card, conducting the transaction almost two times faster (6 seconds to be exact). Impressive, isn’t it?

Mobile Wallets Bonus Programs

Mobile wallet loyalty programs include various coupons, bonuses, order delivery notifications, loyalty points and other perks that cultivate a bond with the customer. Some programs offer to exchange virtual reward points for discounts or products. For example, Starbucks’ My Starbucks Rewards mobile loyalty program provides its customers with a free beverage once they collect ten stars for each drink bought with a mobile phone. From a marketing standpoint, such loyalty programs get customers returning again and again.


Increasingly more people use their smartphones as mobile banking wallets to pay everywhere: in a bar, in a tiny shop or at home, paying off your loan. Thanks to the NFC technology and QR code readers, paying with your phone has become very natural, and advanced biometrics plus AI algorithms can detect and prevent fraudulent activity. What’s more, mobile wallet transactions are twice faster than physical card transactions. This makes them more valuable, and that’s why retailers create special loyalty programs for people who prefer mobile payments. Looks like mobile wallets are the next step in FinTech evolution.


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About Skelia

Skelia, a Nortal company, is an international leader in building cross-border IT and engineering organizations and affiliate companies in Eastern-Europe. For over a decade, we have provided staff augmentation services to a diverse range of clients—from start-ups to Fortune 500 companies. We operate in Luxembourg, the UK, the Netherlands, Ukraine, Poland, and the US.