Digital Wallets 101: Build it internally or use a software provider

It is more than clear now that cashless payments will prevail in the upcoming years. But what’s more impressive is that companies are jumping on the digital wallet trend. According to research by FIS PACE, Millennials and Gen Z own, in most cases, more than three digital wallets, and some of them can reach up to nine.

We have already clarified what a digital wallet is, what its benefits are and how it works. We even put the spotlight on their futuristic relatives – the crypto wallets.

In today’s blog post from the Digital Wallets 101 series, we will discuss what option will be more cost-effective and suitable for companies – to build their own digital wallet internally or to use a software provider.

So let us begin with what are the most important features that a digital wallet should have in order to function seamlessly and what additional functionalities could be added to improve the customer journey so that the user can enjoy the app to the fullest.

What features should every digital wallet have

Must-have components

The first thing to consider when developing your own digital wallet is the features that it should have. We have gathered a list of must-have functionalities for both the app and the admin panel that you can see in the table further down.

It is very critical to ensure that the app has rock-solid security by implementing two-factor authentication as well as an app password. You can even consider adding an extra layer of security by requiring the user to have a PIN code for unlocking their phone.

Another essential part of developing the eWallet is allowing the user to perform financial operations such as paying for bills and receiving and sending funds in multiple currencies. The wallet should also be equipped with NFC technology and be able to make QR payments.


Ewallet’s advanced features

A set of more complex attributes that your digital wallet is good to have, include – a chatbot, in-app camera, one-time password, push notifications and geolocation. All of these will enrich the customer journey and make it smoother.



The admin panel

The admin panel is an essential part of your digital wallet development project. It helps your team manage and control your app’s data as well as perform critical changes and important edits.

Some of the most important features that it should have include – profile management, dashboard, analytics section, support, user management, verification, and authorization. All these functionalities allow you to manage your app without the help of developers and let you get insightful customers’ data to help you grow your business.


Factors Influencing The eWallet App Development Cost

The costs of developing a digital wallet app depend on multiple factors. A good starting point are the features you want your app to have. It is quite obvious that the more functionalities you add, the more expensive it becomes.

The technology used, the app size and design also affect the wallet’s production costs. If the app has a lot of screens, then it will take more time to code and design which in its turn will raise the expenses for its development.

Next thing to take into consideration is the platform that the app will work on. Android is considered to be more expensive than an iOS operating system. However, it is more likely that you will have users with both iPhones and Android phones. So, think about that.

The team size is also something that will cost you some money. You will need a team of experts in different areas such as business analytics, project management, mobile app development, UX and UI design, finance, and QA engineering – just to name a few.


Other factors that you need to consider

EMI license

As an institution that offers digital wallet services in Europe, you will need an Electronic Money Institution (EMI) license. This is something that you must consider as it implies additional costs and requirements such as:

  • Showing suitable management and experience to operate an EMI
  • Having a capital of 350,000 euros
  • Having a business and financial plans
  • Setting up an operational presence in a Europe
  • Presenting a clear description of the EMI’s organizational structure
  • Procedures for managing security incidents, handling complaints, and managing and accessing sensitive payment data
  • Internal AML policies

Of course, these are just some of the requirements, and costs may vary. Fortunately, software providers can also offer EMI consultancy services apart from providing you with a turnkey white label digital wallet.


Will merchants accept your wallet?

While there are many reasons why a merchant would accept your digital wallet, we should pay higher attention to the reasons why they wouldn’t.

One of them could be unmatching, unclear or different API requirements. If that’s the case, then they wouldn’t be able to incorporate your digital wallet even if they want to.

High competition in the sector could be another motive for the merchants’ rejection. A highly saturated market is another aspect that you should take into account. When the competition is high, you should ensure that you have such a competitive advantage that will allow you to beat it.

When performing your market analysis, you should include a section regarding internet connectivity and technological development. Merchants with slow internet connections and unstable infrastructure may decline your offer to include your digital wallet in their payment acceptance options.


The outcome

We know that we cannot cover all detail connected to the process of digital wallet development. However, we hope that we have covered the most important steps in this article.

As you can see there are a lot of things to consider, and you should measure the advantages and disadvantages of developing the digital wallet yourself or leave this task to a software provider. It all depends on your company’s resources, time, and budget.


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