Why Mobile Wallet App Startups Fail?
Talking about the global scenario, we’ve all seen a boom in the usage of mobile wallets in recent times. There’s no need to carry around cash or anything, just scan and you’re done. In simple words, they were created to ease our lives and they did successfully. There were tons of reasons behind those, digitalization being the topmost. A lot of new mobile wallet apps prospered during these times but does that mean that the new ones are destined to fail? (Is it like engineering forever?) Let’s find out.
First of all, we need to understand the difference between a mobile payment app and a mobile wallet app:
A mobile payment app offers online payment services within itself and has one 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 answers are 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 or even directly flash the card number and the other encrypted stuff, thus greatly reducing the chances of online fraud and misusing of the details.
- You can always redeem cash backs 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 the bigger question arrives, if the mobile wallets have these much of plus points, then why are the various startups in this field failing? Why most e-wallets are not able to cope up with the already existing ones? Below are a few reasons:
It first of all entirely depends on the end user, what his behavior is and how does he want his payment methods? Does he really want to shop on these portals rather than the big fat trusted names already there in the industry? A very honest opinion about humans (confident about this), Almost all of the times, we hate to adapt towards an entirely new behavior. It’s hard for us to change.
Existing different methods of payment
There was a worldwide accepted method of payment known as NFC (near field communication). It hasn’t been very successful. The reason was mostly the unacceptance by the merchants and the requirement of additional hardware settings that weren’t available and bought by most of the customers. No one was ready to go out of their league to adapt for a newer, though the easier method of payment.
Risk of investment
And the merchants will not put their money into such terminal hardware unless there is enough return from the customer side. The same goes for startups that fail in terms of e-wallets. They fail to understand the customer and the merchant base and thus fail to create or facilitate the transactions between them. Failing to understand the psychology of the target audience is the biggest reason behind the failure of such start-ups.
Availability of options
Other reasons include the choices that are available to the customers, they have a variety to choose among the offers and discount schemes that are available in the market. This holds true for every industry. The competition and the stakes are already high; thus, these e-wallet companies have to cope-up with that.
Another major reason is the security threat and the lack of trust people have in the new apps that shoot up in the market. Most people, even the youth is not very comfortable in sharing the card details to 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 the customer wallet and the money being stuck in various processes.
If one wishes to excel in this field, it is extremely necessary to put the ‘security of the data of your customers’ into the top priority list. These contain a heck lot of sensitive encrypted information, which if ran into will cause a lot of issues.
For the conclusion, Yes, a great number of these apps have failed currently and previously too, naming them would definitely be good. So, is this a guarantee for dooming to failure? Absolutely not! This only means that there are still a lot of things that you are left to experiment, both with yourself and the crowd that you are targeting, keeping a check on the probable faults at the same time.