Understanding Mobile Wallets: Benefits, Types, and Market Insights

Mobile wallet market statistics

The rapid growth of consumer mobile and P2P payments is driving the global growth of mobile international payment services. COVID-19 has also accelerated the adoption of mobile wallets, with many consumers seeking to avoid physical contact and use cashless payment methods instead.

Here are some recent statistics on the mobile wallet market:

• According to a report by Allied Market Research, the global mobile wallets market size was valued at $1.40 trillion in 2020 and is expected to reach $7.58 trillion by 2027, growing at a CAGR of 24.8% from 2021 to 2027.
• As of 2021, there were over 2.8 billion mobile wallet users worldwide, and this number is expected to grow to 4.8 billion by 2024, according to Statista.
• Due to Global Data, in 2021, the global market value of mobile wallets was $55,679 billion, an annual increase of 28.3%.

What makes mobile wallets extremely popular?

• Convenience

 These software programs allow users to make payments quickly and easily using their smartphones, without the need to carry cash or credit and debit cards. Mobile wallets leverage the capabilities of the mobile phone to enable quick and easy payments.

• Security

 They use advanced encryption technology to protect users’ personal and financial information, reducing the risk of fraud or identity theft.

• Rewards

 Many e-wallets offer loyalty programs or cashback rewards, which incentivize users to use the app and make purchases.

• Integration with other apps

 Mobile wallets often integrate with other apps, such as ride-sharing or food delivery services, making it easy for users to make payments within those apps.

• Contactless payments

A virtual wallet supports contactless transactions, which have become increasingly popular during the COVID-19 pandemic as a way to reduce the spread of germs.

Now,  let’s take a closer look at what a mobile wallet is and its features.

What is a mobile wallet?

A mobile wallet is a digital software program that is stored on customers’ mobile devices and used to make payments and transfers with just a few taps. Mobile wallets store payment information securely, allowing for easy access during transactions. They can also connect directly to users' bank accounts to facilitate both online and in-store payments. It eliminates the need for carrying cash or physical credit cards, as it allows you to shop online, store debit and credit cards, loyalty cards, and other forms of mobile payment. Mobile wallets are powered by NFC (Near-Field Communication) technology, which enables your device to communicate with another device to transfer data. The digital wallet serves as an alternative to the traditional physical wallet.

5 most popular mobile wallet apps

1. Apple Pay

• Platform: iOS
• Apple wallet is widely used for iPhone and Apple Watch users. Apple pay enables contactless payments, online transactions, and integration with Apple services.

2. Google Pay

• Platform: Android phones and other devices (and iOS with limited features)
• Google wallet supports mobile payments, multiple cards, peer-to-peer transfers, online purchases, and loyalty cards.

3. PayPal

• Platform: Android, iOS
• A globally recognized payment service offering a mobile app for managing payments, transfers, and even in-store purchases.

4. Samsung Pay

• Platform: Android (Samsung phones)
• Samsung wallet supports both NFC and MST for payments, making it widely accepted at retailers globally.

5. Venmo

• Platform: Android, iOS
• Popular in the U.S., Venmo allows users to send and receive money, split bills, and pay for services, with a social feed feature showing transactions among friends.

These apps are leading on the market today due to their widespread availability, ease of use, and secure payment processing. 

Mobile wallets are transforming how we manage not just payments, but all aspects of daily life. With the ability to store event tickets, membership cards, boarding passes, hotel key cards, digital car keys, and train tickets, they offer unparalleled convenience and security. This digital shift eliminates the need for physical documents and cards, streamlining our everyday tasks while keeping everything in one easily accessible place. 

How does a mobile wallet work?

A mobile wallet is a digital payment system that stores payment information, such as credit card details, on a mobile device, so the customer does not need to carry physical wallets. Here’s how it works:

1.Setup

The user downloads and installs the mobile wallet app on their mobile device and adds their personal payment information.

2. Payment

To make a payment the customers select the payment method, and tap or scan their mobile device on a point-of-sale terminal or another mobile device with NFC capabilities.

Most mobile wallet apps allow users to set a default card or default payment method, which will be automatically selected for transactions. If the user wants to use a different card for a specific purchase, they can manually choose a different card within the app before completing the payment.

3. Security

Digital wallets use various security measures to protect payment information, such as encryption, two-factor authentication, and biometric authentication, such as fingerprint or face recognition.

4. Integration

Mobile wallets can also integrate with other apps, services, and loyalty programs, enabling users to make payments, earn rewards, and manage finances from a single platform.

Different types of mobile wallets

The choice of wallet type depends on the needs of the users and the company. For example, if you are engaged in e-commerce, then a closed wallet can be a convenient solution for you and your customers, like Amazon Wallet. Check this article to get more information about creating your own digital wallet.

Technologies behind mobile wallets

Mobile wallets use several technologies to enable secure and convenient payment transactions. Some of the key techniques used by a digital wallet are:

• QR codes

QR codes serve as a contactless payment method in which a special image is scanned by a mobile app. It is an alternative to digital money transfer at the point of sale through an online payment  platform to provide in store purchases. Customers can use their device’s camera and the wallet’s scanning function to make purchases for in store payments. To complete a transaction, this technology uses the information about the merchant and payment processor contained in the bar-coded image. It is predicted that by 2025, 30% of all smartphone owners will use QR codes to make payments.

• Near-field communication (NFC)

Near-field communication is the technology that enables contactless payment. NFC allows two devices, such as your phone and a payment terminal, to communicate with each other while in close proximity (about an inch and a half, or 4 centimeters). This technology is considered secure because the data transmission between the two devices is encrypted. NFC technology uses the same security protocol as chip-enabled payment cards, making it more secure than a physical credit card. Some mobile wallets use a personal identification format, such as a secure key or QR code, to verify and link payment information during NFC transactions.

• Magnetic secure transmission (MST)

MST uses “magnetic” signals to establish a connection between the customer’s mobile device and the point-of-sale terminal. MST replaces a card swiping with wireless transmission of magnetic waves from the user’s device, turning any card reader into a receiver for online purchases. The main difference between MST and NFT is that MST is compatible with a wider range of card readers than NFC, which only works with NFC-enabled credit card readers.

• Tokenization

Mobile wallets use tokenization to replace sensitive payment information, such as credit card numbers, with unique tokens that can be securely stored and transmitted, providing more safe transactions than a physical card.

• Biometric authentication

Many digital wallets use biometric authentication, such as fingerprint or facial recognition, to verify the user’s identity and prevent unauthorized access.

• Encryption

The digital wallet uses encryption to protect users’ personal and financial information, ensuring that it cannot be accessed by unauthorized parties.

Security measures in mobile wallets

Security is a top priority for mobile wallet providers, and several advanced measures are in place to protect users’ financial information. One of the most effective techniques is tokenization, which replaces sensitive credit card information with a unique, randomly generated token. This means that when you pay with your wallet, your actual credit card details are never shared with the merchant, reducing the risk of data theft during transactions.

Authentication is another crucial layer of security. Mobile wallets like Apple Pay use Face ID or Touch ID, ensuring that only the authorized user can access the wallet and approve payments. Google Wallet, on the other hand, requires users to enter a password or use fingerprint recognition before completing a transaction. These biometric and password-based protections help prevent unauthorized access to your wallet and financial information.

By combining tokenization, biometric authentication, and strong password requirements, mobile wallets offer a secure environment for storing credit card information and making payments. This multi-layered approach gives users peace of mind, knowing their card information and transactions are protected every time they pay.

What are the must-have features of a future-ready mobile wallet in 2026?

Mobile wallets are becoming more popular due to its convenience, security, and ease of use. Customers can easily conduct transactions and send money. But, sky is not the limit, because there are a number of functionalities available for digital wallets users.

The must-have features of a future-ready mobile wallet in 2023 include:

• Enhanced security

The top priority for any mobile wallet is to ensure the safety of the user’s funds and personal information. This includes two-factor authentication, biometric authentication, and encryption of sensitive data.

• Cross-platform compatibility

The mobile wallet should be compatible with multiple operating systems such as iOS, Android, and even desktop platforms.

• Multiple asset support

A future-ready mobile wallet should support multiple types of assets such as cryptocurrencies, fiat currencies, and digital collectibles.

• Decentralized ID (DID) Support

A mobile wallet that integrates with decentralized identity solutions will allow users to have more control over their personal information and have a single point of identity for multiple services.

• Seamless integration with other financial services

Mobile wallets should be able to easily connect with other financial services, such as savings accounts, investments, and insurance. This would allow users to manage all their financial needs from a single, convenient platform.

• DeFi integration

The mobile wallet should have built-in integration with decentralized finance (DeFi) platforms and protocols, enabling users to access a wide range of financial services such as lending, borrowing, and trading.

• Analytics and insights

A mobile wallet that provides users with insights and analytics into their spending patterns and investment performance will be a valuable tool for managing their financial accounts.

• Multiple payment options

To stay competitive, mobile wallets should support a variety of payment options, including debit cards, credit cards, bank transfers, loyalty cards, and digital currencies.

• Artificial intelligence and machine learning

A future-ready digital wallet should leverage AI and machine learning to provide personalized financial insights and recommendations to users.

• Global reach

As more and more people travel and conduct business globally, digital wallets must offer seamless cross-border transactions and currency exchange.

These are some of the key features that a future-ready mobile wallet in 2023 should have, but the full functionality depends on the target audience and the goals of the wallet.

Google Wallet, Amazon Pay, and other leading options

The mobile wallet landscape is filled with popular options, each offering unique features to meet different user needs. Google Wallet, for example, allows users to store credit and debit card information, loyalty cards, and even gift cards, making it easy to manage all your payment methods in one place. When paired with Google Pay, users can make secure, contactless payments with their Android devices both in-store and online.

Amazon Pay is another leading digital wallet, enabling users to make online purchases and in-store payments using their Amazon account. This wallet streamlines the checkout process, especially for frequent Amazon shoppers, and supports a variety of payment methods, including debit cards and credit cards.

Other popular mobile wallets include Samsung Pay, which is known for its wide compatibility with payment terminals, and Apple Pay, which integrates seamlessly with iOS devices and the Apple Watch. PayPal remains a favorite for online purchases, offering secure payment processing and the ability to transfer money between users.

These wallets often partner with banks and financial institutions to ensure secure transactions and easy access to funds. Whether you’re shopping online, making in-store purchases, or managing loyalty cards, leading mobile wallets like Google Wallet, Amazon Pay, Samsung Pay, Apple Pay, and PayPal provide users with flexible, secure, and convenient payment solutions.

In-store and online payment experiences

Mobile wallets are designed to make both in-store and online payments fast, easy, and secure. When shopping in-store, users can simply tap their mobile device—such as a smartphone or smartwatch—on a payment terminal to complete a contactless payment. This process is powered by technologies like NFC, allowing for quick transactions without the need to handle cash or swipe a physical card. For example, Apple Pay and Google Pay both enable users to pay in store by holding their device near the payment terminal and authenticating with Face ID, fingerprint, or password.

For online purchases, mobile wallets streamline the checkout process. Instead of entering card details manually, users can select their preferred wallet – such as Apple Pay or Google Wallet—as the payment method. Authentication is then completed using Face ID, Touch ID, or a password, making the transaction both secure and convenient. This not only speeds up the payment process but also adds an extra layer of security, as sensitive card information is not shared with the merchant.

Whether you’re shopping in store or online, mobile wallets provide a seamless payment experience, allowing users to pay quickly and securely with just a few taps on their device.

Credit card integration in mobile wallets

One of the key advantages of mobile wallets is their ability to integrate multiple credit cards, making it easy for users to manage and use different cards for various purchases. Adding a credit card to a mobile wallet is a straightforward process: users simply enter their card information into the wallet app, which then securely stores the details using advanced encryption and tokenization.

Mobile wallets like Apple Pay and Google Wallet support a wide range of credit and debit cards, including those issued by major banks such as Chase, Bank of America, and others. This flexibility allows users to choose their preferred card for each transaction, whether they’re paying in store, online, or transferring money.

When a payment is made, the wallet uses tokenization to protect the actual credit card information, ensuring that sensitive data is never exposed during the transaction. This not only enhances security but also provides peace of mind for users who want to keep their financial information safe while enjoying the convenience of digital payments.

With support for multiple credit card types and secure storage of card information, mobile wallets make it easier than ever to pay, manage funds, and access different payment methods—all from your smartphone or other mobile device.

Advantages of using mobile wallets for business

The mobile wallet is beneficial for both users and companies, providing a secure payment service and boosting users’ satisfaction. This financial software offers several benefits for businesses:

• Improved customer experience

These technologies provide a quick and convenient way for customers to make payments, which can enhance their overall experience with the business.

• Increased sales

To accept mobile wallet payments, businesses need compatible payment terminals that enable customers to pay by tapping or waving their device.

• Reduced costs

Mobile wallet payments are often cheaper than traditional payment methods such as credit cards, which can help businesses reduce their transaction fees.

• Improved security

A digital wallet uses advanced security measures to protect customers’ payment information, which can help businesses reduce the risk of fraud and improve customer trust.

• Enhanced loyalty programs

Many mobile wallets offer loyalty programs that businesses can use to incentivize repeat purchases and encourage customer loyalty.

• Data insights

Digital wallets can provide businesses with valuable data insights on customer behavior, including purchase history and spending patterns, which can help inform marketing and business strategies.

How to create a mobile wallet solution for a payment business?

SDK.finance Mobile Wallet Solution

If you run a business, you can integrate mobile wallets into your payment system. This allows customers to make payments quickly and easily. Integrating a mobile wallet into a business can take time and effort, but it can provide significant benefits in terms of an improved customer experience, higher sales and lower transaction costs.

A robust mobile wallet solution should allow a person to transfer money to another person using their email address or phone number.

Developing payment software from scratch is a complex and time-consuming process, but you can save time and money by using a ready-made fintech solution. With SDK.finance white-label digital wallet software, you can launch your mobile wallet faster or add electronic asset accounting functionality to your existing product. Thanks to its adaptability and flexibility, our e-wallet platform is suitable for various industries and business types. You can also choose on-premise or cloud-based software versions to launch your payments business in a short time.

Watch the SDK.finance mobile app UI of our Platform, designed to empower you to create secure and feature-rich financial experiences in record time. Supercharge your mobile payment, finance or digital wallet app launch with SDK.finance:

Conclusion

Mobile wallets are becoming increasingly popular due to their convenience, security and ease of use. These software programs are extremely popular for customers and businesses worldwide thanks to their advanced features. Introducing these payment methods into your business operations can help you increase user satisfaction, boost sales and speed up the transaction process.