People think of digital wallets as alternatives to banks
77% of payment app users with low-to-medium incomes hold savings in their digital wallets/apps.
Connecting the unbanked population to the digital economy
About 1.4 billion or 25% of adults in the world remain unbanked due to the lack of banks, internet access, capital, or proof of identity. Digital wallets present an opportunity for everyone to make payments more securely, affordably, and conveniently rather than relying on alternative financial services or microfinancing methods.
Beyond P2P payments
Digital wallet trailblazers including PayPal, Venmo and Cash App started as peer-to-peer (P2P) apps that enabled digital money transfers amongst users — and do not require users to input banking information to use basic send or receive functionality. Now, these offerings allow users to transact with companies, pay their bills, and even pay with governments, all of which are paving the way for the unbanked to transact digitally and securely.
Digital wallets will unlock new forms of banking for anyone to participate
In 2016, a study linked M-Pesa, a Kenyan mobile money app, to a 2% decrease in the county’s poverty rate. M-Pesa was launched in 2007 as a P2P payment app catering to the unbanked community, and it has since become a super-app allowing users to send money internationally, pay bills, and transact with their favorite companies. Digital wallet companies like M-Pesa will continue to pioneer ways to connect individuals to the global economy without the requisite of banking information.