Payments

Mobile wallet fundraising to drop 73 percent this year: report

  • Fundraising for mobile wallet startups is on track to fall 73 percent in 2017
  • As the mobile wallet market begins to see consolidation, dominant players seek differentiation through biometrics
close

Email a Friend

Mobile wallet fundraising to drop 73 percent this year: report

Even though it’s not clear who will “win” mobile payments or which players are here to stay, new data shows latecomers and nonessential players are floating into the periphery while the dominant players prepare for the future.

Fundraising for mobile wallet startups is on track to fall 73 percent in 2017 on a year-over-year basis, according to research released Monday from PwC’s financial technology strategy consulting platform, DeNovo. That figure should be taken as a sign of industry consolidation as well as preparation for a post-app world, said Michael Landau, fintech payments lead at PwC.

“Apps are the way to reach consumers in a mobile environment today, but how long will it be until apps aren’t the best way to reach them?” he said. “How many years will it take for the U.S. to adapt to the WeChat strategy like they have in China?”

The consulting and auditing giant shared the statistic as a single data point, one born of a wealth of data it has collected and analyzed in its proprietary intelligence platform. DeNovo does not cover public entities and the mobile wallets assessed aren’t particularly well-funded or well established.

Landau noted that the number of apps that people download has been falling, while pointing at a 2015 survey which taught the world that although people use an average of 24 apps each month, they spend 80 percent of their time in the same five.

“Consumers are really only really using a few apps at any given time so you have to make any app extremely valuable,” he said. “What is critically important regardless of context is authentication.”

Banks and startups alike are responding to that need to differentiate by investing in biometric authentication, which allows users to verify their identity when confirming a payments transaction or logging into their mobile banking apps, for example, by using their unique physical traits instead of a password from memory. Today, fingerprint authentication is most common, but many financial firms are closely studying eye, face, palm and voice recognition as well.

“It feels futuristic but the idea is any mobile wallet strategy needs to prepare for rapidly changing contexts in how they reach consumers,” Landau said.

0 comments on “Mobile wallet fundraising to drop 73 percent this year: report”

Payments

QuickBooks introduces new payments hardware for small businesses as everyone guns for Square

  • Intuit has introduced a new innovative, inexpensive card reader targeting small businesses.
  • Square's rising dominance over the SMB payment ecosystem is increasing competition around SMB payments.
Zachary Miller | July 26, 2021
Payments

Emphasizing high APY, Amex debuts checking account for SMBs

  • Kabbage Checking offers one of the highest APYs available to SMBs with 1.1 percent interest on balances up to $100,000.
  • SMBs can also access a line of credit between $1,000 and $150,000.
Shehzil Zahid | July 07, 2021
Payments

Capital One launches new flexible payment options for small business customers

  • Cash flow problems are among the biggest challenges facing small businesses, particularly during the pandemic.
  • Payments startup Melio will provide access to accounts payable and receivable cash flow management tools for Capital One’s SMB customers.
Ismail Umar | June 29, 2021
Payments

Affirm’s new deal with Shopify bakes it into Shop Pay Installments

  • The partnership gives Affirm a new distribution route with access to 1.7 million merchants.
  • A Barclays report says investors are underappreciating the partnership but that there’s no need.
Shehzil Zahid | June 24, 2021
Member Exclusive, Payments

Revolut moves into e-commerce with Revolut Shopper

  • Revolut Shopper allows users to find online discount deals while offering security with single-use virtual cards.
  • Other new features include purchase protection, username personalization, and the ability to track spending.
Ismail Umar | May 27, 2021
More Articles