The Rise of Digital Wallets: Top Predictions for 2017

To stay ahead of the rapid changes in payment technology, digital wallet firms need to understand who is driving these changes.

As currency is disappearing from people’s wallet they are turning to online options. Every other shop, big or small, is accepting some form of digital payment powered by digital wallets. Post-demonetization, we have witnessed a sharp increase in tie-ups between retailers and digital wallet firms.

To stay ahead of the rapid changes in payment technology, digital wallet firms need to understand who is driving these changes.

Let’s analyze the key trends that will mark the evolution of digital wallets next year.

Data Security

The true value of the digital wallet goes beyond the transaction; it has immense potential to generate an unparalleled amount of customer transactional data. There is no doubt that this accumulated data helps service providers and merchants harness necessary information to engage the customer with a better experience for each stop on the path to purchase.

However, data security is essential for bringing more people into the cashless system.

We should not forget that cash provides a sense of security to the people.

With the spike in cases related to online fraud, the government needs to develop a stringent data security protocol in consultation with the service providers.

Identity theft protection

The risks associated with electronic payment instruments are more diverse and harmful. Being the victim of digital hackers can lead to a whole host of problems including, card theft, card skimming, identity theft, account takeover, fraudulent transactions and data breaches. Each of those incidents leads to countless hours of dealing with financial institutions and law enforcement to try to gain access back to accounts, redress fraudulent activity and reclaim one's own identity.

Financial gain is the main purpose of identity theft but can also include application in criminal or medical scenarios.

With Aadhar card linked to our bank accounts, any attack on the banks' critical infrastructure can cause widespread financial damage and create havoc amongst the populace. Identity theft monitoring and related services are already being offered by many companies globally. For example, ID Watchdog, a US-based firm, offers protection from identity theft and offers both patent-pending monitoring technology and a unique theft resolution guarantee.

QR codes, NFC and BLE beacons

Mobile wallets will follow two separate paths—general-purpose wallets which will use NFC for connectivity, and the proprietary, retailer-based wallets which use a variety of technologies, including optical/QR code and BLE beacons. Today, banks, MNOs, and merchants are all competing in this fast-evolving space, and to have an edge over competitors, they need to have a futuristic mobile wallet capability, whether a proprietary or branded wallet, that suits their strategy and consumer value proposition.

Credit cards to be replaced for mobile wallets

In 2017, consumers will continue to opt for a mobile wallet. With its ability to create a fast and seamless experience, consumers will opt to replace their credit cards for mobile wallets and NFC technology.

The great Indian cash-drought has resulted in more and more people making payments online and tech companies are trying to make the most out of the situation.

Samsung is currently testing its Samsung Pay mobile payments service in India and could release the service in the first half of 2017.

Digital assistant

We already have Google Allo and Siri as personal digital assistants. In 2017, the digital assistant will make a significant impact on the POS and retail industries.

With all the data from Google, a personal assistant can provide a whole new level of interaction between consumers and their mobile devices.

We can expect digital assistants to interact with users on a more personal level, connecting all the data, and providing them with helpful information based on online habits and behaviors.

Chatbots

Chatbots witnessed an exponential growth this year and from technology companies to retail brands, everyone has invested in this space. It’s all about real-time, personalized approach to engaging the consumers like never before.

Chatbots are going to be even bigger in 2017, with consumers being able to conduct transactions via chatbots.

Bots will change how people shop online. Instead of being limited to browsing or searching, it will be possible to get personalized recommendations based on individual order history or preferences.