The perception of consumers towards the relatively new facility of the mobile wallet is that of it being a next-generation payment alternative. The technology facilitates a totally seamless disbursement of payments through an electronic wallet, making cards or cash seem passé. The elevating smartphone diffusion having assisted the companies seamlessly communicate with their customers, has also led to the increasing volume of internet users (consumer segment) getting escalated into the network of content and commerce.
The advent of global digital economy has brought numerous benefits to the technology adapting consumers of today. One such benefit is that of availing convenient financial services now also offered by consumer internet companies. This phenomenon has furthered the development of an entire consolidated ecosystem of consumer services (ride-sharing, app-based financial services and payments, food and parcel delivery, loan and credit, etc.) for the recipients. This trend is poised to assist also in curtailing poverty and inequality.
Take the example of the Indonesia based revolutionary ride-hailing (initially launched as a taxi and motorbike service provider—also providing parcel and food delivery services—via Go-Food) company, Go-Jek. Through its Go-Pay platform (launched in April 2016), Go-Jek allows drivers to accept the payments from passengers (those opting for a mobile wallet) directly to their bank accounts. This e-payment solution, apart from elevating engagement to financial services, has resulted into greater financial inclusion (inexpensive access to finance for the low-income group) and has created a bank loan accessibility market for the erstwhile unbanked sect of the Indonesian society. Notably, Go-Jek acquired three fintech firms (Kartuku—for offline payments space, Midtrans—for online payments space, and Mapan—ensuring financial inclusion for the unbanked) in December 2017 to strengthen its unique positioning also in the vibrant digital payments space of the Indonesian market.
With the launch of mobile payment services like Apple Pay and Google Wallet, the adoption of a near field communication (NFC) payment arrangement seems likely. Since 2014, in the US, Apple Pay (now also in China—with China UnionPay, as an entity registered in Shanghai free-trade zone, as reported by the Wall Street Journal) provides a simple, safe and confidential medium to make payments easily by way of its products—iPhone, iPad, and Apple Watch.
Other consumer internet companies venturing into the payment (financial) services domain are Uber (a semi-closed wallet partnered with Paytm—and later with the launch of its own Visa credit card in partnership with Barclays), Alibaba (Alipay), Tancent (WeChat Pay), Grab (GrabPay), Ola (Ola Money, powered by Zipcash), Lyft (Express Pay), Google (Google Wallet—from payments to now P2P transfers; Android Pay), Microsoft (Microsoft Wallet—in partnership with MasterCard and Visa), Facebook payments, Hike Messenger (Hike Wallet—partnering with Yes Bank in India and Tancent Holdings in China, it’s the earliest messaging mobile application to commence payments feature), Amazon (Amazon Pay), etc.
Apple Pay’s competitors in China are Alipay and WeChat Pay with 53.7% and 39.5% third-party mobile payment market share (as of Q1 2017)—per the research by Analysys, based in Beijing, China. Interestingly, Google Wallet now facilitates accessing a P2P payment interface that allows consumers to transmit money (securely with FDIC insurance) to their contacts simply by using a phone number (no email necessary).
Notably, Ola has of-late ventured into financial services (FinTech) since it has applied for a license to operate as an NBFC (non-banking finance company). Aiming to make a move beyond Ola Money and Ola Credit (a short-term credit—pay later service), it’s reportedly planning to become India’s largest micro-insurance platform. It’s worth mentioning here that Amazon—in partnership with Axis Bank—just launched for Android users in India the real-time payment system Amazon Pay UPI.