The fintech sector has experienced tremendous development and innovation in recent years. The digital payments market is expected to be worth $460 billion by 2025. Fintech startups are fueling a boom in the industry and leading digital advancements.
Using technology advancements, FinTech is developing innovative products and services, especially in consumer-based products – Digital wallet app solutions.
However, success in this field is fraught with difficulties. 90 percent of digital wallet startups fail because of a poor market match and incompetent partners.
In this article, we’ll go through the basics of what causes wallet app startups to fail, as well as how to prevent stepping on a landmine that leads them to fall. Before you can comprehend why this is the situation and how to avoid making similar mistakes, you must first grasp what a wallet app is.
What is a Wallet App?
A wallet app is a digital version of a wallet. The wallet app substitutes all of the items that are normally kept in a physical wallet such as credit cards, cash, driving license, membership cards, etc. Instead of taking them all around with you, the app keeps all of the necessary information digitally.
You may perform a multitude of transactions with ease. Digital wallet apps enable you to quickly verify transactions at the point of sale. Also, the data in the wallet app is highly secured, reducing the risk of fraud.
Why do Wallet App Start-ups Fail?
1. Ignoring Legal Aspects
Along with banking rules, digital wallet app development companies must adhere to legal requirements in order to function properly. This includes, among other things, know-your-customer (KYC), anti-terrorist funding legislation, and consumer data protection. Many startups do not conduct adequate legal research, increasing the chance of product failure.
Financial firms are heavily regulated and have a complex regulatory framework. As a result, it is critical to include legal considerations in the development of a business strategy. This includes accurate licensing and the laws that go along with it, particularly for financial firms developing digital wallet app solutions.
2. Lack of Research
One of the most common mistakes made by developers is failing to conduct in-depth market research. It is crucial in ensuring that the application fulfills the demands of the user. Market research will assist you in comprehending the challenge and developing a unique business model for your product’s users. Extensive market research enables you to grasp the requirements of the consumers and evolve accordingly.
3. Misunderstanding the Customers
Understanding the attitude consumers take with their finances is critical. If you can not grasp this, you won’t be able to succeed as a digital wallet app start-up. Listening to your customers and favorably incorporating their suggestions into new product features is a monumental task. Nevertheless, doing so can lead to profitable results, particularly if you are a wallet app startup.
Furthermore, Most companies overestimate their market by assuming that everybody who uses a mobile app will also use a mobile wallet. You will need to come up with a plan for your wallet app that will entice people to utilize the wallet app over competing mobile wallet apps.
Remember, discounts and cashback are merely temporary fixes. Marketing campaigns, customer support, and the overall business strategy can all help to change customer preferences for wallet apps.
4. Misinterpretation of Their Own Offering
Business owners must offer innovative features and relevant traits into the wallet app. To make your digital wallet app development successful, you must be selling a solution and a benefit to your clients. If you don’t, the audience will not consider your app important enough to alter their purchase habits.
To promote your mobile app in accordance with the standards, you must first identify what benefits and value it provides to clients. So, do not make the same error that the majority of companies do. Rather, make sure you are not one of them.
5. Tricky Navigation
Many wallet app startups fail due to the complexity of using the app. Customers who find the app complicated to use will uninstall the app without a single thought. The app’s UI and UX must be as simple as attractive. Because if a consumer finds your software difficult, he will never install it again and will never recommend it to others. Always remember that a mobile app is designed to make your life easier, not to make it more difficult.
Furthermore, wallet app entrepreneurs must continually introduce new features to streamline their products and services.
6. Marketing is Being Overlooked
It’s possible that the digital wallet program you are about to release is flawless, and your consumers will adore it. However, even the most advanced wallet app is useless if your target audience is unaware of its existence. So, if you want to reach your target audience or be successful in any situation, the right marketing strategy is required.
7. Security Risk
People are sluggish to accept financial products due to concerns about security in digital banking, and this skepticism has led to the failure of a number of firms. The wallet apps are view with caution and skepticism due to the high amount of bank scams that take place.
On the other hand, digitalization has been a boon to most of us. It has also left our personal information vulnerable to data breaches.
If you want to flourish in this business, it is critical to highlight what you do to protect the security of your clients’ data. After all, wallet apps include a lot of sensitive data that, if stolen, can wreak devastation.
How to Make Your Wallet App Successful?
Today, customers demand a simpler and omnipresent eWallet solution with comprehensive wallet data storing capabilities as well as a compelling value proposition. Hence, your digital wallet app solution must be simple to use, provide excellent customer service as well as added-value perks, and be tailored to match specific local needs.
Build a robust security framework for your Wallet app, making the app as secure as possible. Moreover, after the payment completion through the app, make sure to notify all of the persons involved as soon as possible.
Provide them with detailed reports on their money’s whereabouts. If a transaction fails due to an error. Ensure your users are aware of it. Also, let them know what you are doing to solve the problem. Being open and honest with your customers increases your prospects of long-term success.
What’s more, choose your development partner wisely. During the selection process, you should extensively verify to see if your development partner has relevant experience and expertise.
Your development partner should follow all necessary regulatory guidelines and be knowledgeable about current cybersecurity requirements. He should have a solid risk mitigation strategy in place.
Given the high cost to develop a mobile wallet app, failure means not only a missed opportunity but also a major financial loss. While learning from one’s failures is a smart business approach, the best tactic is to avoid making them in the first place.
So, if you compile all of the mistakes made by unsuccessful wallet app startups and make a real effort to prevent them, you might just have a winning formula for a digital wallet app.