Beginner’s guide to growing a Digital Wallet Platform

The following pointers are based on my experience growing GoPay (the fintech arm of GoJek) in Indonesia. GoPay has consistently been ranked as the #1 digital payments wallet in Indonesia since 2018.

Let’s quickly revisit the history of digital payments first:

Digital wallet based payments really took off starting 2007, when M-PESA introduced a mobile first payments system. Subsequently, smartphone sales exploded as well. 13 years in, let’s have a look at how the world of digital wallet looks like today.

Source: The Papers
Source: The Papers

Some key facts that further indicate the growing importance and popularity of digital wallets:

  • Mobile wallet users are predicted to grow from 2.3B in 2019 to 4B by 2023
  • Global cashless payments are set to double in the next 5 years (from a base of ~700B transactions in 2020)
  • Facebook, Apple, Microsoft, Google, Amazon (FAMGA) effect: Most big-tech companies have jumped into the frenzy of digital payments in order to seamlessly integrate their services, reach more users, and cut out other payments providers to grow their margins - commoditizing digital payments even further

Now that you have some basic context regarding digital wallets, let’s dive into the top 5 strategies you should keep in mind while growing a digital wallet platform (backed by research):

1. Focus on adding the use cases (especially the more frequent ones)

Use cases are all the different situations you spend money for. These could be - Transportation, Food delivery, Online commerce, Offline shopping, Investments, and Donations to name a few.

Source - Contoworks

This may sound like common sense, but surprisingly, it is not.

Research says that users inherently:

  • want to first feel secure about being able to use their payments platform at most places they spend at. After all, nobody wants to be left hanging without a means to pay with
  • want to manage most (if not all) payments through one platform as there is a significant upside in keeping transactions in one place
  • don’t want to take the cognitive load of associating different use cases to different platforms

Hence, you can’t have a digital payment wallet serving only one or a few use cases. You have to be able to service all use cases, if not right away, then long term.

I like to think of this as the “defaulting” effect. You must have observed this playing out at Amazon or other e-commerce websites. These websites ask you to select one of your payment modes as a default and then use it across all their use cases, instead of bothering you every time you shop. Easy, yet powerful.

Also, it is worth noting that in order to prioritize between incorporating different use cases, you should try and cover the more frequent use cases (Transportation, Grocery) first and then move on to the less frequent use cases (Bills, Entertainment). Consumers would forgive you if you are new and cover most of their payment occasions.

2. Build a trustworthy brand

Payments are all about trust. In the case of digital wallets, you need to be able to trust the platform with your hard-earned money.

Unfortunately, fraud is very rampant in the digital payments world (as well). As per a recent estimate, 74% of enterprises globally reported digital payment fraud to some degree. International payments/remittances are at an even bigger risk of payment fraud.

Since users need to provide confidential payment info to the payment providers, they want to be 200% sure that their money is safe with you. Unbeknownst to the users, some companies tend to de-prioritize the safety of their platforms, and rather focus on user-facing product/feature roll-outs. However, even one or a few instances of fraud can taint your brand and hurt your growth prospects over a longer-term.

Thus, making efforts to build a safe and secure platform, and managing trust with consumers should be one of the top priorities for a digital wallet platform.

10 most trusted brands in the world (out of Top 100 brands globally)

10 least trusted brands in the world (out of Top 100 brands globally)

Quick Trivia - how many companies in the above two images operate in or have aspirations to operate in the digital payments space?

3. Maximize visibility

Cultivate visibility because attention is currency.

Chris Brogan

You might be aware of the following Purchase funnel:

Higher awareness leads to more interest, which leads to…you get the drift. This holds true for digital payments as well, albeit, with a slight twist. As a digital payments player, you need to make sure that you are maximizing your visibility, not just anywhere, but at the Point of Sale (POS).

Usually, when you think of buying something, you don’t think a lot about “how you are going to pay”. You think about “how to pay” when you are about to pay (eg on a payment landing page online). Given this intrinsic user behavior, payment providers are forced to adopt a “whistles and bells” strategy to try and capture user’s purchase funnel.

The following are some examples of this strategy in action.

Being visible at the Point of Sale is crucial to drive awareness/adoption

4. Give “Intelligent” promotions

How we pay is a habit. Most of the time, we don’t even remember how we paid for a purchase we made a while back. As a digital payment platform, you might need to incentivize users to influence this “mostly unconscious” behavioral trait.

Most established and sizable payment providers today would have experience in running promotions/discounts, loyalty programs, subsidies, etc. for enticing users to either try or simply continue using their platform. Pricing, Promotions, and Loyalty are big streams within payment companies (even broken up into smaller sub-teams for focus), taking up a lot of time, effort, and monetary resources.

Usually, the promotional strategies account for 70–80% of the overall expenses of a digital wallet player, so it would be an understatement to say that it is important to do promotions in a scalable, sustainable and scientific (SSS) way.

I don’t want to take the focus of this article away from the bigger picture here, hence I would be writing a follow-up article on how to go about doing promotions, the “SSS” way. Stay tuned!

5. Develop a strong and symbiotic relationship with the merchants

Happier the merchants, the happier the users!

I saved the most important point for the last. It is crucial to note that users don’t usually interact with payment platforms directly. Instead, they interact with the merchants they are making a purchase from/through. Hence, merchants have huge bargaining power in terms of how the users would ultimately pay.

As the saying goes “The way to a man’s heart is through his stomach”. Similarly, the way to a user’s wallet is through the merchant.

In order to develop a strong relationship with the merchants, you need to prioritize what is important for the merchants and not just selfishly think about what is important for you as a platform.

Some pain-points/priorities for the merchants could be:

  • Growing their sales
  • Managing their finances
  • Getting favorable lending rates
  • Expanding their sales network

Along with managing payments, if you can solve for one or more merchant pain-points/priorities as well, merchants would stick to you and be willing to move mountains to support your growth. Also, given the way merchant businesses are structured, they tend to have a higher switching cost than users (who usually have 0 switching costs). Thus, merchant happiness becomes one of the biggest determinants of success for a digital wallet platform.

That is it, those were the 5 most important points for growing a digital wallet platform.

If you liked reading the above, do clap, so it keeps me motivated. What else would you do to grow a digital wallet? Tell me in the comments section.


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Priyanshu Taparia

MBA student at London Business School. Worked at GoJek and Uber previously. Know a thing or two about Mobility, Marketplaces, and Payments.