The ability to make payments with our mobile phones is a modern convenience that many of us have come to rely on. But the apps that make these payments possible, called mobile wallets, have a host of other benefits in addition to making it easier to make purchases and send money to friends and family. Here’s everything you need to know about mobile wallets.

The importance of mobile wallets

The mobile wallet industry processed more than $1 trillion in transactions around the world in 2021, according to the 2022 GSMA Mobile Money Report. Peer-to-peer transactions, or one individual sending money directly to another, totaled more than $386 billion that same year ⁠— an average of more than $1 billion each day.

The popularity of mobile wallets continues to grow around the world. This is especially true in regions where fewer adults have traditional bank accounts, such as sub-Saharan Africa, South Asia, and East Asia. Collectively, these regions account for just over 90% of all mobile wallet accounts and more than 97% of the volume of mobile wallet transactions sent in 2021.

There are about 1.35 billion mobile wallet accounts currently registered around the world, meaning just over 16% of the human population currently has a mobile wallet account. This number is only expected to grow as the availability of smartphones and the reach of mobile wallet networks continues to expand around the world, representing an unprecedented opportunity for financial inclusion.

What is a mobile wallet?

At the most basic level, a “mobile wallet” is simply an application for a mobile phone that allows users to manage and make transactions with money in their account. Among other features, these apps enable users to pay for goods and services without the need for a physical debit or credit card. Payments can be made through your phone (when shopping online, for example, or ordering food through a delivery app), or by scanning your phone at a physical point of sale (POS) terminal.

Many of us enjoy the convenience of being able to make payments using just our phone, but modern mobile wallets offer a host of additional features to help users manage their money and work toward their financial goals. Often, a mobile wallet can replicate many of the features of a traditional bank account. For example, many mobile wallet users can receive money transfers and pay bills right from their phones and are increasingly able to withdraw cash from their accounts at select locations.

How do mobile wallets work?

Mobile wallets can serve a variety of purposes, and the setup process will depend on the type of mobile wallet you choose. For example, if you want to connect your mobile wallet to an existing credit or debit card, you’ll need to input the card information into the app in order to be able to use it to make payments.

Once your credit or debit card number is saved in the mobile wallet app, it’ll allow you to pay by connecting with payment terminals through near-field communication (NFC) technology. As long as your debit or credit card information remains the same, you should only need to input the info into your mobile wallet app once, and you’ll be able to use it whenever you need.

Other, more full-service mobile wallets can offer many of the same functions as a full bank account. Sometimes referred to as “digital banking”, this type of mobile wallet grants users access to a much wider array of services, including tools to track spending and saving, the ability to pay bills, options to deposit and withdraw cash in certain locations, and much more.

Are mobile wallets safe?

In many cases, mobile wallets are among the safest options for storing and accessing your money.

The security features on most smartphones, such as access PINs, fingerprint sensors, and facial recognition can help ensure that you are the only one able to access your mobile wallet. Additional security features of the wallet itself ⁠— such as requiring two-factor authentication (2FA) to complete a transaction ⁠— can protect your account from attempts at hacking or unauthorized use.

More importantly, mobile wallet providers must follow strict local and international regulations, which means they are obligated to maintain a high standard of security.

Your mobile wallet will receive ongoing updates through your phone’s app store, ensuring that it always has the latest security measures in place. At the same time, you can amp up your own phone’s security for an extra layer of protection.

To ensure that the funds in your mobile wallet are as secure as possible, you should only use mobile wallet apps you’re familiar with and that are available for download through your phone’s official app store. This way, you can ensure that you are trusting your money with a responsible provider that follows the proper regulations and best practices.

DroppCash’s mobile wallet offering

At DroppCash, we are committed to getting your money to where it matters. Mobile wallets are a crucial part of our worldwide network and are already making a significant impact on financial inclusion globally.

DroppCash customers can send money directly to family members and friends. Alongside bank deposits and cash pickup, the option to send directly to a recipient’s mobile wallet account is helping ensure that our customers can send support for their loved ones across the globe in the manner most convenient and impactful for them.

Tochukwu Eruchalu, DroppCash’s Founder and CEO, believes that mobile wallets serve as a key piece of the puzzle when it comes to connecting people with loved ones living in remote locations. “Mobile wallets are providing recipients in rural areas with a safe and convenient alternative to traditional banking. Beyond that, it’s amazing how fast the mobile wallet industry has grown in just 10 years.”

Tochukwu also spoke about the amazing ability of mobile wallets to reach less developed areas, such as parts of Africa and South Asia. “Our brick-and-mortar model relies on there being some infrastructure, financial or otherwise, where customers can pick up their remittances in cash from DroppCash Agent locations. Now, with mobile wallets, we’ve prioritized partners that can help us reach a great number of customers living in rural areas, as well as offering greater choice for existing customers looking to make the most of our digital channels.”

Though sub-Saharan Africa has some of the highest remittance costs of any region in the world, it is also the among the most developed when it comes to mobile wallets. By powering digital remittances, we can help customers in remote areas cut other expenses, including transportation fees to their closest cash collection point.

Thanks to the omnichannel capability of DroppCash’s network, customers can send funds from their own mobile wallet, from their bank account, or by bringing cash to a DroppCash Agent location ⁠— no matter how they choose to send their support, funds sent to a recipient’s mobile wallet arrive in a mere moment.

So, yes. That wallet app that has been sitting on your phone for some time? Turns out it’s more than just a handy payment method. It’s a powerful tool for financial inclusion.

Ready to send money? Transfer money safely, easily, and almost instantly with the DroppCash Money Transfer app or by visiting your nearest DroppCash Agent location today!