mobile app development

Why Wallet App Startups Fail? Common Mistakes You Should Avoid in 2021

From customer misunderstanding to the security threat, here’s what you should avoid.

Wallet App Startups Fail

Back when Apple launched its first ever wallet app in 2014, few thought that the technology would be as successful as it is today. Now, most consumers prefer wallet apps that render the need to carry cash unnecessary.

In fact, the masses carry smartphones that are compatible with wallet apps. This showcases the vast potential for startups. You can create a wallet app and target it to all smartphone users across the globe.

While the idea of launching a wallet app startup may sound lucrative, it is not without its pitfalls. In fact, quite a lot of startups fail to leave a mark. Before understanding why this is so and how you can avoid such mistakes, it is essential to know what a wallet app entails. 

What is a Wallet App? 

A wallet app is a digital form of carrying your wallet. While a payment app allows you to use your smartphone to make payments, a wallet app does more than this bare minimum.

A wallet app replaces all things that reside in a wallet usually. This includes credit cards, cash, driving license, membership cards, etc. Rather than carrying them all physically with you wherever you go, the app stores all the required information digitally.

Therefore, you can perform various types of transaction with ease. They allow you to verify purchases at the point of sale in no time. When transacting through a wallet app, your credit card information is not displayed. Therefore, your data is kept secure from prying eyes, thereby reducing the chance of fraud.

In most cases, wallet apps also allow users to benefit from rewards. Each wallet app may have its own distinctive reward program where users are offered things at a discount.

Why Do Wallet App Startups Fail? 

Even though wallet apps are an ingenious tool, most startups revolving around wallet apps fail. Why is this so? Here are three of the most common mistakes startups make.

Wallet App Startups

1. Misunderstanding the Consumers 

Regardless of what industry you are in, now, you can no longer be product-centric. You must think about your customers. And that requires a thorough understanding of their behavior. This is why consumer behavior is such a pivotal aspect of the marketing and businesses of today.

One of the most prominent mistakes wallet app startups make is misunderstanding their consumer base. Most businesses overestimate their market by concluding that anyone who uses a mobile app would be equally interested in using a mobile wallet.

However, you must remember that while wallet apps are a type of mobile application, it is an entirely different ball game. Why? Well, because it offers a novel method of transacting. For people who are used to purchasing through credit cards and cash will initially be reluctant to adopt this new technology.

This inertia in user behavior means that you must alter your business model accordingly. You must create a plan that doesn’t just sell your wallet app but also helps in altering the customer mindset.

Remember, discounts and cash back are only a short-term solution to the problem. In the long run, you must deal with this consumer behavior by altering it. Change consumer perception through your marketing campaigns, customer support, and overall business model. 

2. Misunderstanding Their Own Offering 

Mobile wallets are not just mobile wallets. They are much more than that. This holds true for all industries. Business owners must look at their offering beyond the surface level.

Yes, features and attributes matter. But, at the end of the day, you must be selling a solution and a benefit to your customers. If you don’t, the masses won’t find your app relevant enough to switch their purchasing behavior.

Understand what your mobile app delivers in terms of value and benefits. Market it accordingly. The failure to do so has caused various startups their business. Ensure that you are not one of them.

3. The Threat of Security 

People are slow to adopt financial tools. And this skepticism causes various startups to fail. Why are wallet apps met with hesitance and uncertainty? This is mainly because of the sheer number of bank frauds that occur. While digitalization has been a blessing for most of us, it has also made our data vulnerable to potential data breaches.

At such times, it is understandable why many find it hard to trust wallet apps. Failure to build trust from the get-go has caused various wallet apps to fail.

If one wishes to succeed in this industry, it is important to highlight what you do to ensure the security of the data of your customers. After all, wallet apps have a lot of sensitive information, which if breached can cause havoc.

How to Create a Successful Wallet App?

Apart from avoiding the apps mentioned above, there are certain factors that you must consider and incorporate to guarantee the success of your wallet app. This includes changing user behavior by creating a new business model or revamping the model around the current user behavior.

Let’s understand it better by the following examples:

Case 1:  Square App 

Square App is a classic example of how a startup used a new model to alter user behavior. This solution proved to be a great bridge between buyers and sellers. It provided the latter with a smooth POS solution.

Rather than changing their consumer’s behavior or preferences, it merely focused on altering the action of the merchants instead.

To transform sellers into loyal users of the app, Square introduced simple and quality pricing models and added convenience to the mix to attract sellers from across the globe. By deciding which side to target and altering their preferences, the Square app was able to become a success in a matter of years. 

Case 2: M-PESA

M-PESA has managed to become one of the most popular wallet apps in the world. Their user base in East and North Africa accounts for much of their profits. This app was able to leave its mark by leveraging the current model.

In North and East Africa, most of the money was transferred via the Hawala system. In this system, when you have to move money, you must make payment to an agent who would then contact someone else in the desired location through which your acquaintance can take the money from.

What M-PESA did was simple. It merely digitalized this method of transaction, without changing it at all. So, rather than eliminating the need for agents, it provided a digital solution to them which helped in the smooth transfer of money through the Hawala system. 

Things to Consider When Developing A Wallet App

If you are thinking of launching your own successful wallet app, here are some crucial factors you must consider while developing a wallet app.

Wallet App Startups

1. Don’t Over-complicate it

The whole point of why users may be tempted to use a wallet app rather than carry around a physical wallet is convenient. And no one likes complicated apps that take too much space on their mobile phones.

Therefore, you must ensure that you create an app that is light and simple. The interface should be user-friendly. Swift functionality must be guaranteed. 

2. Keep Security Your Priority 

Making a secure wallet app is a necessity. If you don’t do so, you will lose out on customers. Therefore, you must pay close attention to making your app as safe as possible.

Protect your app, and by extension your customers from hackers by developing a robust security framework for your app. 

3. Delivery Information

Your customer shouldn’t be confused about where your wallet app can be used and where it can’t be. Instead, you must provide all such information to them from the get-go. This reduces the hassle of shop-hunting and increases the usage rate of your wallet app.

4. Give Prompt Payment Status 

Make sure to update all the parties involved promptly after payment is made using the app. Give them detailed reports about where their money went.

Let’s say a transaction isn’t completed due to some error. Let your users know about it. Also, tell them what you are doing to fix the issue. Being transparent with your customers improves the chances of your long-term success. 


Yes, a lot of wallet mobile apps have failed in the past. Does this mean you are doomed to failure as well? No! It just means that there are a lot of things you must consider and mistakes that you must avoid.

The fact that you know what you don’t have to do increases your chances of survival! Don’t make a mistake those before you did and you will be good to go.

Aparna <span>Growth Strategist</span>
Written By
Aparna Growth Strategist

Aparna is a growth specialist with handsful knowledge in business development. She values marketing as key a driver for sales, keeping up with the latest in the Mobile App industry. Her getting things done attitude makes her a magnet for the trickiest of tasks. In free times, which are few and far between, you can catch up with her at a game of Fussball.

Want To Hire The Best Service Provider?
MobileAppDaily will help you explore the best service providers depending on your vision, budget, project requirements and industry. Get in touch and create a list of best-suited companies for your needs.

Featured Success Stories

mobile app development

How to Create a Speed Dating Video App?

4 min read  

As our daily responsibilities increase, it becomes more difficult to make time to socialize frequently and find the ideal person to spend time with. This dilemma of how to manage a lack of time and increase social interaction has created a variety of speed dating applications. In 2022, Statista esti

mobile app development

Mobile App Testing & Game Concept Validation: Why and What to Test

4 min read  

It’s no secret that time is money, that’s why in some cases, saving time means saving millions of dollars in the long run. For this reason, mobile app and game developers, from startups to enterprises, need to go for mobile app testing to test their mobile app concepts and ideas even bef

mobile app development

Here is What Makes You a Pro-Swift Developer

4 min read  

Are you planning to delve into the silkiest slice of the development cheesecake?Looking for the hottest piece of tech right now?Then, your decision to click on this blog is a sign from the cosmos that you are on the right path.Mobile app development has become the most significant sector

mobile app development

7 Effective Ways To Maximize Your App Development Budget in 2021

4 min read  

Budget is the foremost requirement for any operation and app development is no different. With the rapid advancement in the app industry and the advancement of technology, the app budget around the world is increasing and people are investing more and more in their app development projects. To devel

Featured Success Interview


Interview With Coyote Jackson, Director of Product Management, PubNub

MAD Team 4 min read  

MobileAppDaily had a word with Coyote Jackson, Director of Product Management, PubNub. We spoke to him about his journey in the global Data Stream Network and real-time infrastructure-as-a-service company. Learn more about him.


Interview With Laetitia Gazel Anthoine, Founder and CEO, Connecthings

MAD Team 4 min read  

MobileAppDaily had a word with Laetitia Gazel Anthoine, Founder and CEO, Connecthings. We spoke to her about her idea behind Connecthings and thoughts about the company’s services.


Interview With Gregg Temperley, Founder Of ParcelBroker App

MAD Team 4 min read  

MobileAppDaily had a word with Gregg Temperley, Founder. We spoke to him about his idea behind such an excellent app and his whole journey during the development process.

App Development

How to Implement Artificial Intelligence and Machine Learning in an Existing App?

MAD Team 11 min read  

AI is for decision making, and ML makes the system to learn new things from data.

MAD Originals
MAD Originals

Cut to the chase content that’s credible, insightful & actionable.

Get the latest mashup of the App Industry Exclusively Inboxed

  • BOTH
Join our expansive network, build connections and expand your brand presence.