Over the decades, payment technology has evolved by leaps and bounds across the world. In 1950, the first modern credit card was launched in the United States. Just 70 years later, it is now possible to use mobile wallets to pay for goods and services with a mobile phone. In addition, the COVID-19 pandemic has made virtual payment options more popular than ever.
1. What is a Mobile Wallet?
Mobile wallet technology allows people to receive, store and spend money using a mobile phone. This is often referred to as "mobile wallet" or the name of a specific service like mPesa, EcoCash, GCash, Tigo Pesa, and many others. There are over 270 different mobile wallet services worldwide, although they are most popular in Africa, Asia, and Latin America. The mobile wallet is a popular alternative to both cash and banks because it is easy to use, secure, and can be used anywhere there is a mobile phone signal.
2. How does a mobile wallet work?
The mobile wallet keeps funds in a secure electronic account linked to a mobile number. In some cases, the wallet number is the same as the phone number, but not always. Therefore, before sending money to a mobile wallet, ask your recipient for the exact number. For other information on the services available via a mobile wallet in the beneficiary's country, consult the provider's website or visit one of their authorized agents.
3. How to get a mobile wallet
Your mobile wallet stores information about your payments so you can make contactless payments.
You can add the payment information below to your mobile wallet:
- Your credit card number
- Your debit card number
- Your prepaid credit card number
- Your loyalty cards
You have to follow the following steps to get a mobile wallet:
- Download a mobile wallet app
- Read and agree to the terms of the agreement for the mobile wallet application
- Register your payment cards (debit, credit, or prepaid cards)
- Choose a default payment method, i.e., the method you will use every time unless you change it
Use password protection options for your mobile wallet. This allows you to reduce the risk of an unauthorized transaction being made. An unauthorized transaction is a transaction that you did not make or authorize. Some mobile wallets allow you to use your fingerprint instead of a password.
4. How secure are mobile wallets?
As the mobile wallet is similar in concept to a bank account, funds held in a mobile wallet account are protected by local financial regulations. In addition, mobile wallet providers and partners such as WorldRemit are required to verify the identity of their users, making the illegal use of these services much more difficult for fraudsters and criminals.
Mobile wallet services record every transaction and account balance, so the user's money is kept safe even if the cellphone or SIM card is lost or stolen. In addition, each transaction requires identification in the form of a secret PIN code.
5. Mobile wallet use
You can utilize your mobile wallet to make mobile payments:
- Contactless and tap-and-go payments
- Payments by QR code (Quick Response)
You can also utilize your mobile wallet when making online or in-app purchases.
Your financial institution or merchant may impose a limit on how much you can spend with your mobile wallet.
6. How your mobile wallet remembers your payment information
Mobile wallets store information about your payments in one or more ways.
A cloud is a secure network on the Internet. Your mobile wallet encrypts your payment information and stores it in the cloud.
You need an active internet connection when making a payment so that your mobile wallet can retrieve your payment information from the cloud.
Your mobile wallet may store all your payment information on a chip in your mobile device. The chip links your payment information to the payment card network.
Payment card networks include:
- American Express
This means that you may be subject to fraud if your mobile device is lost or stolen.
Your mobile wallet may store information about your device's SIM card. A SIM card contains information that identifies mobile devices.
This means that you may be subject to fraud if your SIM card or mobile device is lost or stolen.
7. Advantages of the mobile wallet?
Almost anyone with a mobile phone can have a mobile wallet account. This service is so accessible that it is extremely useful in the world's most remote regions, where there is no bank nearby. Here are its other benefits:
Versatile: Users can do a lot with just their mobile wallet account. They can send, receive, store, and spend money from their mobile phone accounts.
Direct: Users can receive money directly to their mobile phones without going through any intermediary.
Fast: Users can receive, send and spend money instantly.
Convenience: Mobile wallet accounts are always at hand as they are installed on the user's mobile phone. The mobile wallet can be used anywhere there is a mobile phone signal.
Secure: Funds held in a mobile wallet account are protected by local financial regulations. Users' identities must be verified, making it difficult for criminals or malicious individuals to misuse these services.
8. A list of some of the best mobile wallets in different parts of the world
Android users have an integrated virtual payment system with Google Pay. Users can make contactless payments in several countries, including Austria, Singapore, or the United States. However, sending money to relatives with Google Pay is only possible in the United States and India at this time.
Users of iOS devices, including the Apple Watch and iPad, can pay with their phones in over 60 countries.
Samsung device owners can also use the phone's mobile wallet app to make payments. The app is available in at least 24 countries.
Although there are many mobile wallet options in China, Alipay is the undisputed king. With 1.3 billion users, Alipay accounted for 55% of the Chinese mobile payments market in 2020. Users love this offer because it also offers wealth management, investment, and microloan services.
Many well-known virtual wallets are Chinese, but other Asian countries also have their own mobile money providers. For example, in the Philippines, GCash has 33 million users and is the most popular mobile wallet in the country so far, and has the most users.
DaviPlata is a mobile wallet offered by Banco Davivienda, one of the biggest banks in Colombia. With DaviPlata, Colombians can pay for many goods and services for which they would otherwise have used cash. They can also withdraw money from their DaviPlata wallet at Banco Davivienda ATMs.
With DaviPlata, Colombians have access to financial services without the need for a bank account. Instead, users can transfer money between wallets, get their balance on their phones, and make digital payments.
MTN Mobile Money
With 46 million users worldwide, MTN is one of the most well-known and used mobile wallets in Africa. It offers services in Rwanda, South Africa, the Republic of Congo, and at least 22 other countries in Africa and the Middle East.