Digital wallets: Personal finances in the palm of your hand

Digital transformation went into high gear with the outbreak of Covid-19. From online shopping to video calls, we relied on technology like never before. These months were marked by the need to modernize everything that had remained static over decades. In this context of constant change, digital payments and banking were no exception. Here, we’ll explore exactly what e-Wallets are and what companies that provide these services can do to improve user experience.

What are e-Wallets or digital wallets?

Due to the variety of their offerings, they elude a single definition. Each e-Wallet has unique functions and features depending on the use case. But, what they all have in common is that they are mobile applications that provide financial services like making and processing payments, money transfers and paying bills or taxes. Sometimes they even offer a platform for investing. At the same time, they allow users to see their account balance and payment history to facilitate better financial planning. They are, in short, software that transfers all the functionalities of a traditional physical wallet to a digital landscape, adding the comfort of being able to access everything in a few clicks and features that make users’ lives easier.

Thanks to e-Wallets, buyers and sellers can trust that their money is safe and carry out operations in a way that’s simple, convenient and secure.

Digital wallets in Latin America and Spain

In recent years, particularly in Latin America where the number of people using the formal financial system is rapidly expanding, FinTech companies are booming. The investment in new startups and the launch of new companies and products are on the rise. At the same time, there has been an explosion in the number of people using these products.

According to Finnovista, Latin America is home to more than 1,858 Fintech startups. Not only are they creating projects on their own, but they also provide larger corporations with opportunities to form collaborations and alliances in the sector to create innovative results.

We can zoom into some particular countries to see the staggering growth. In Mexico, the number of fintech startups grew 14% year over year, reaching 441 by 2020. Up until the same year, in Spain, the growth rate was 16% to create a total of 392 startups, while in Colombia the number surged by 26% to reach 200.

By 2023, digital wallets are predicted to be behind 18% of online purchases, 5% of physical purchases and a total of 43% of sales in Latin America, according to a study by FIS Worldpay.

Besides helping users, e-Wallets also provide an important societal function: formalizing the economy. That’s why governments around the world are supporting this shift away from cash. Take Italy for example, where under-the-table sales are thought to account for around €100 billion. There, cash remains king. According to the Italian central bank, 58% of all the financial transactions in 2019 were done in cash. Across the Eurozone, that figure was 48%. That’s why the Italian government has been taking big steps to promote the use of digital money, with e-Wallets as a starting point.

What are the top e-Wallets in Spain and Latin America?

Speaking broadly, in Spain – and other European countries – the e-Wallet market can be divided into two large groups. On one hand, you have those related to the big tech companies like Apple, Google and Samsung. On the other, the digital wallets of the traditional banks.

According to Statista, Apple Pay is the winner, with 28% of the Spanish market, followed by CaixaBank Pay (23%), Google Pay (22%), BBVA Wallet (18%), Samsung Pay (15%), Santander Wallet (10%), Bankia Wallet (9%), TWYP (7%), Abanca Pay (3%), Sabadell Wallet (3%), Orange Cash (2%) and LK-Pay (1%).

In Latin America, all the way from Mexico to Argentina, the main e-Wallet is Mercado Pago. It was created by Mercado Libre, the e-Commerce giant, and allows users to receive payments, send money, pay with QR codes, refill public transport cards, pay for other services and invest in mutual funds. All that, without the need for a traditional bank account.

Five keys to creating a digital wallet

Every payment service provider (PSP) should focus their strategies not only on their own interests but also those of their primary users: people who pay for goods and services and people who sell them. If PSPs want to maximize their transaction numbers, which is ultimately what generates profits, they must listen carefully to both groups. User experience is central to success.

Here’s a list of what to keep in mind to build a better digital wallet:

• Make registration smooth and easy: although this process is generally only done once, this is your chance to make an excellent first impression on the users you want to capture and retain.
• Lower the learning curve and optimize the onboarding process: in each iteration of the project, the customer journey should become more intuitive, simpler and easier. It is also essential to create a dashboard with the main features, reducing the cognitive load on the user and ensuring faster navigation. In the end, the simplest solution will generally be the best.
• Seamlessly integrate tools that will provide insights: using surveys is essential to better understanding how the customers have interacted and where they’d like to see improvements. It’s also critical to use those insights to constantly improve the user experience.
• Keep things simple: each interface must be as clear as possible. Users should intuitively understand what they should be doing and the tangible benefits of doing them on your platform. People specialized in UX writing should be strategically engaged to create the content on the interfaces.
• Safety is everything: The users are trusting you with their hard-earned money. The number one intangible that will define success is generating the trust of your users.

Mutiplica and Banco Azteca

With these five points as a base, Multiplica became the strategic partner of the Mexican Banco Azteca to optimize its Tomiin e-Wallet. In this project, we added relevant and verifiable functionalities for two user profiles (consumers and businesses) in a record-fast period of 12 weeks.

The project was highly successful for the Banco Azteca:

• It saw the number of users increase by 64,000 and added 55,000 new consumers on its app for iOs devices.
• It captured 1,690 initial users and 110,000 new users on the app for consumers. Another 5,690 initial users and 21,000 new ones began to use the business app for Android devices.

The little details are what make the big differences. That’s why, seeing the strong growth of the digital wallet sector, it will become ever more important to create relevant experiences. Learn more about how we helped Banco Azteca optimize Tomiin.