How Successful Are These Payment Apps, And Is There Scope For New Apps
Payment facilitators and mobile wallets are one of the most used mobile applications today. While digital transactions were more or less prevalent globally, the demonetization in November of 2016 catalyzed digitization in the finance sector in India. Brands like Paytm and PhonePe have skyrocketed their user counts since then.
But what makes mobile payment apps like PayPal or Paytm succeed? That’s what we’ll take a look at in this article.
Firstly, do these apps really succeed? Let’s take a look:
- The value of digital payments in India recorded 769% share of the GDP in fiscal year 2019 (source). This proves that India, like the rest of the world, is welcoming cashless transactions.
- In Dec 2016, Paytm had 177 million users (source). In September 2019, the number of active users recorded was 350 million. That’s nearly a 100% growth in just 3 years.
- PayPal currently has almost 300 million active users. (Source)
- More than 87.5% of online buyers use PayPal.
These numbers speak for themselves, proving that users in India and across the world prefer digital transactions. This proves that there is scope for payment apps to succeed. The only question is how.
Essential features that make payment apps succeed
It helps to learn what makes apps like Paytm and PayPal successful. They have features that encourage users to engage and stay loyal:
1. An intuitive, easy to use UI
If you have used either of these payment transaction apps, you’ll know that their UI is extremely easy to use. Once registered, a user can easily transfer money by either adding the recipient’s email address, number, or scanning a QR code. This ease of use and convenience is what users look for in a payment transaction app. It’s important to understand that users are not looking to do more than monetary transactions with these apps.
2. Support international transaction
PayPal makes it very easy to transfer funds across currencies. It takes the current conversion factor into consideration and converts the amount being sent, for you. This eliminates the need for a user to use multiple apps for money transfers to people in different countries.
3. Ledgers and invoices
Everyday users can track their spending habits by going through the in-built ledger file, which is a neat feature that simulates a bank’s passbook or ledger. Additionally, businesses can generate invoices directly from the app, equipped with their logo, merchant info, etc.
4. Instant money transfer
Both PayPal and Paytm offer instant money transfer options. This is an incredibly useful feature especially when users are in urgent need of receiving or transferring money.
5. Convenience of use
We spoke about how these apps have an easy to use interface. They go a step ahead and make using the app for transactions even more convenient by providing personal QR codes that can be scanned to transfer money quickly.
6. Safety and security
Security is the number one concern among users of digital payment apps. These apps, however, add a layer of security to their interface by providing password protected logins. Since these are mobile apps, the phone’s security measures (passwords, thumbprint access, etc) are an additional layer of security.
Designing a Mobile Payment Application
While the aesthetics of the app are subjective and will depend on your brand, there are some rules that need to be followed to create a highly attractive and engaging design. We speak about this in depth in this knowledge article: Designing For FinTech | 4 UI/UX Rules
How do Mobile Payment Applications Earn Revenue
1. By charging a transaction fee – Some payment apps, like PayPal for example, levy a surcharge on every transaction. The percentage of the amount depends on the type of transaction – if it’s a personal money transfer or a payment on goods sold.
2. Providing pro features – PayPal has a free and a paid pro plan, with the pro plan having additional features like a virtual terminal to receive payments over the phone or email.
3. Providing add-on features – PayPal provides services like monthly billing, fraud protection, etc as add-on features, for which it levies a monthly fee.
4. Interest on deposits – Some payment apps use the money saved as balance by a user, as a deposit in liquid investments which provides interest.
Developing a Mobile Payment Application
There are many technology stacks available today using which a payment app can be developed. You need client-side programming languages, database technologies, server-side programs, hosting technologies, etc. It’s important to approach a seasoned development company that has experience working with financial apps to get your idea off the ground in the right way. This guide will help you get started: Developing a Web/Mobile Application – The Best Approach & Methodology.