Mobile Wallets – their rising role in banking of future (1st part)

Apr 02, 2020

We all remember when PSD2 came as a promise of banking disruption and opened the doors for third party providers in Europe. Global mobile payment providers are already exploiting the void and need for mobile money management services, while banks remain reluctant and consider the complexities they already face and business risks involved with sharing client data. Nevertheless, not all regions are prone to adopting mobile payments at the same speed. Asia-Pacific seem to lead the trend, while western markets on the other hand observe these latest technology innovations with concern and even distrust.


The use of mobile payments is set to continue its inexorable rise and become the second most common payment method after debit cards by 2022.

Paying preferences differs hugely in regions. The mobile payment industry is driven by China’s huge population and its multitude of tech firms. Their multifunctional app WeChat recorded more than 1.15 billion monthly users in 2019, each spending more than 70 minutes on the app daily – which is in itself proof how an integral part of life an app can be. Alipay and Samsung pay have over 1 billion users. Apple Pay is the runner-up with 450 million users. Global players show the capacity to become global payment players in future years through their massive platform reach. They are also the ones paving the way for e-payments with jurisdiction changes.

Australia is predicted to be entirely cashless by 2022, according to Capgemini World Payments report. In Europe, statistically e-banking penetration is highest in Northern Europe, where 12 % of all transactions are conducted through mobile.

The overall success of mobile wallets on developing markets, such as those in Asia, is a direct consequence of deepening smartphone penetration, a young population of users and low jurisdiction barriers for market entry. According to KPMG research, only 27% of the population across South-East Asia has a bank account, so mobile wallets are also a mean of access to the financial system in emerging & underbanked markets.


Mobile wallets make transactions revolutionary convenient when compared to mobile banks. Though, this is largely due to their leveraging of a significantly better start; not being restricted by a large number of regulations and processes that have been set in place for banks for a long time, and are getting stricter even as we speak. Newer, more modern payment companies don’t have brick and mortar locations. Their sole dedication is to ensure that users get top-of-the-line transfer services with low, to no additional fee payments.


There are two ways to pay with a mobile wallet, dependent mostly on the kind of mobile wallet you use. The first option is paying with QR code (short for quick response), which is similar to the linear bar-codes we all know from products in shops, but it has an important advantage – it stores large volumes of encrypted data. So, when the cashier generates the bill, he generates a QR code which contains all payment information in encrypted version. When user scans the code, QR pattern is decoded by the software on his smartphone so his mobile wallet app can confirm payment information.

Some merchants don’t generate specific QR for each purchase, instead they use single QR code. When user scans the code, he connects with merchants account, inserts the payment amount and confirm transfer.

Mobile Wallet QR payment
Mobile Wallet QR payment


Second way of mobile payments is NFC or near-field-communication, which works through the same chip technology as contactless credit cards. It sends information over radio waves just like Bluetooth, but the range of transmission is much shorter, only around 10 cm.

At the cashier, user simply swipes his phone instead of card. But this one comes with some limitation though. High end devices already support NFC technology, but it does not work on all mid rangers.

There are many mobile wallets on the market; some work on NFC (like Apple Pay, Samsung Pay or Google Pay), but still majority of mobile transactions happen through QR payment because of wider availability for users and merchants worldwide. If there is a mobile wallet on your market, you should try one out. Protect it with a good PIN and you’re good to go.


Imagine yourself on Friday after 5 pm doing a simple transaction. A money transfer would have to wait until Monday morning to be processed, for payment systems start to operate again. In the meantime you mustn’t forget to check if transaction really went through on Monday morning.

On the other hand, transactions through e-wallets are processed instantly. The recipient receives a message that the money has arrived, free of charge.

Mobile wallets obviously win this one.


There is a big difference between a mobile bank and a mobile wallet. Imagine your friend paid for lunch and you want to return the money.

First you sign in your mobile bank, choose payments and start filling in the form. First name, last name, his account number. Wait, which is his number? So, you ask him to take a photo of his card and send it through chat. And you’re back to typing, then you check once more if the digits are OK and finally you hit ‘Confirm’. But, not until a few hours pass (at least, maybe you have to wait for the next day) will the payment be seen on both accounts. So, we need to remember to check later if everything went through. It’s really a pain.

So, next time you open mobile wallet app, sign in, tap payments and choose your friend from a phonebook list or simply enter his phone number. Type the amount and tap ‘Send’. The next second you’ll get the confirmation that the transfer is complete and your friend will receive a notification which confirms he received the money.

Managing finances over mobile phone opens many opportunities and can be involved in numerous daily processes. Many mobile wallet providers are starting to introduce useful features that compliment usual mobile wallet functionalities. They can be Communication Channel between users and merchants, where you can negotiate delivery, provide feedback, receive coupons, ask for details on warranty, returns etc., leading to optimal customer satisfaction. Many of them have option for receiving E-invoices directly into your mobile wallet, where you can pay them with a few taps and never ever lose them in e-mail.


Most security concerns arise due to lack of knowledge how mobile payments really work. Mobile payment apps are tokenized, which means they are encrypted and they don’t store or send credit card information in its primal form, instead they send tokens.

Mobile payments are a safe choice for various reasons:

– Credit Card data is stored on a cloud, not a phone. If the phone gets stolen, the account data can be accessible through a new device just as well.

– Access to credit card data is protected by passcode only user knows. Even if a phone gets stolen, nobody else can access account data.

– All information is transferred through encryption so merchants can’t access payment data.

As always, we humans remain the biggest risk – whether our money is safe depends on how we safeguard it. The first line of defense is a good and well protected password. We wouldn’t leave our wallet outside and unattended, so why would we do that with our phones? Besides, if we always lock our phone and update our OS regularly to ensure all security patches are up-to-date, there’s nothing to worry about.



The revolutionary mobile wallet apps are already winning users all over the world due to their overall convenience and simplicity. Because they are especially popular with younger generations, predictions of mobile wallet usage show that they only just started their conquering march.

Yes, mobile wallets do come with some limitations, but it comes down to whether you have healthy security habits, such as locking phone and app with a good PIN number. Otherwise, they are actually safer than regular wallets – if the later gets stolen, your money is as good as gone. Mobile wallet transactions are conducted in a matter of seconds, which is a huge advantage compared to traditional digital banking. Besides being fast, mobile transactions are easy to conduct, requiring no more filling in account numbers.

As anywhere else online, we leave digital footprints with every transaction. We really like new mobile wallets from Fintech companies, but we don’t trust them with our data like we trust traditional banks.

Privacy, trust and the power of loyalty open many interesting questions for mobile wallets. Who will lead the market of mobile payments in the future? Don’t miss the debate in our next blog to find out.


Comtrade Fintech developed Unyti Mobile Wallet. Our solution was designed to integrate with banks and enhance eCommerce, meeting the expectations of digitally-savvy users at the same time.

  • Unyti Wallet enables fast and easy money transfers, such as payments in physical and online shop, or money transfers among friends and family members.
  • Our mobile wallet enhances eCommerce with direct marketing and communication platform for merchants and their customers to encourage interaction and cross-selling, bringing businesses closer to customer than ever.
  • Unyti Wallet can be integrated in digital banking, and as such means a distinctive advantage for banks in their battlefield with Neobanks.

Interested in more? Contact us or download your Whitepaper here.

Deni Radović
Deni RadovićBusiness Analyst

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