Fintech services (the meaning of fintech comes from “fin” = financial and “tech” = technology) had entered our daily lives and influenced the way we control our finances. Can you imagine if it wasn’t possible to make a contactless payment in the store? Or imagine if you have to go to a bank for every statement you need? Or if you have to wait in the bank for every money transfer you send and receive? This was the reality not long ago, but it seems like we had almost forgotten it.
Most people probably don’t realize how much fintech services have an impact on our lives. Our consumer habits about managing our accounts and making modern payments have been radically transformed. Some of the fintech solutions that have drastically changed the finance sector are mobile banking, blockchain, cryptocurrencies and digital wallets.
Did you know that by the end of 2021, more than 1 billion people had made mobile payments through a digital wallet? Probably most of these people didn’t know about the existence of e-wallets/digital wallets 3 or 4 years ago. That’s the reason this change is so revolutionary.
The great interest in contactless transactions with a phone, a watch and other NFC devices is due to several main factors: the coronavirus pandemic, the popularity of mobile payments among younger consumers, the freedom of payments that digital wallets bring, their accessibility, and the time they save.
The fintech industry is making changes in people’s lives around the world and in this way is shaping consumer trends about modern payment methods. We have prepared a list of 4 interesting facts that are proving this. They show how innovative financial services have become a part of our daily lives and why they will determine the future of payments.
1. Changing consumer habits related to payments
Before the development of fintech technology, probably no one could have imagined that we would be able to control our finances entirely through our phones (and only 15 years ago, no one could have imagined that we would have a computer in our phones and use the device for something other than talking). Thanks to the rapid progress in this area, nowadays, everyone can do everything through their device – from ordering the necessary goods to taking out insurance and even seeing a doctor. Digital wallets are a means by which all cash bills, cards, payments and additional financial services are conveniently collected in one place – on your phone, in one single app.
It is no surprise to anyone that more and more people are using digital wallets. All transactions made with these apps are fast, easy and secure. According to a study from last year, the number of users of digital wallets worldwide will reach 4 billion by 2025. The value of transactions made with them for the same period is expected to exceed 10 trillion euros (average 2500 euros spend per user). According to the data, in the next 2 years, more than half of e-commerce transactions will be made through digital wallets.
2. Providing benefits to the participants in the payment process
In the beginning, when digital wallets were invented, many people around the world have been sceptical of this whole new way of controlling their finances. Over time, they realized that their money can be stored and used safely and securely both in a bank and in a non-bank financial institution.
Customers of digital wallets also receive many benefits. Only a small part of them are making all kinds of payments (mobile, online, to different recipients – close people, business partners and also local providers, municipalities etc.), using a large number of accounts in different currencies and sending international transfers with low fees makes travelling easier than ever.
The use of digital wallets is bringing benefits not only to individuals who are “the payers” in the payment process but also to businesses. Easy payments are also a must for merchants who want to provide their customers with the convenience of contactless transactions and secure internet payments. With the wide spreading of contactless payments around the people, digital wallet issuers are gaining more and more customers. An interesting fact is that 86% of the participants in the PwC survey believe that over time, traditional payment service providers will collaborate with fintech companies and technology providers as one of their main sources of innovation.
3. Changing the attitude towards traditional payment methods
The safety habits of people around the world changed dramatically when they faced the spread of COVID-19 in 2020. This increases the interest of millions of users in digital wallets, where they do not need to make face-to-face contact to manage the money in their accounts. Digital wallets manage to offer their customers a different and more innovative consumer experience than what banks give them.
According to a World Retail Banking report for 2022 by Capgemini, more than 75% of survey participants say they would use a fintech service if it saves them time and is low-cost. Consumer trust in fintech services is growing, the report also shows that 85% of respondents would recommend fintech solutions that they use to their friends and relatives.
4. Defined the future of payments
One of the biggest factors in the rapid development of digital wallets and the growth of their popularity is the proliferation of mobile payments among young consumers. Undoubtedly, people between the age of 18 and 26 (also called Generation Z) are the largest age group using digital wallets and other fintech services.
Since the beginning of 2020, nearly half of people of this age pay in retail outlets and online with digital wallets. We can confidently say that Generation Z will be the ones who will dictate future trends in fintech and will shape the future of payments until the next generation (Generation Alpha) take their place.
Undoubtedly, digital wallets will become part of the daily lives of many more people around the world. If you want to keep up with the latest fintech solutions, register in iCard, confirm your identity and fill out our short questionnaire. In iCard digital wallet, you can open up to 21 IBAN accounts in 7 different currencies for free and make easy and contactless payments anywhere in the world.
Learn more about iCard digital wallet: https://icard.com/en