Consolidating the digital financial ecosystem: the main challenge of digital wallets to massify their use

The use of digital wallets accelerated with the pandemic. Virtual payments are unstoppable and more and more citizens find in these tools an option to make transactions quickly and easily, without having to go to physical branches. Cash is between a rock and a hard place. 

According to BBVA, the Latin American fintech ecosystem is made up of 1,500 players, including startups, traditional companies and regulators. Colombia, with 200 fintechs, is the third country in the region with the most advanced industry, according to Finnovista figures. However, the main challenge that companies that offer digital wallets must face to massify and carve their way to success is to consolidate an ecosystem that enables the centralization of citizen payments, without costly intermediaries. 

To get users to deposit all their money in these wallets, they need to be able to pay for everything from there. Undoubtedly, this objective requires hard and constant work. It is not a goal to be achieved in the short term, but if it is achieved, the success of this instrument is guaranteed. This means that, as a first step, the fintechs offering this service must consolidate alliances with large retailers and ensure that even the smallest merchant offers this payment alternative. 

China is an example that such a challenge is not a utopia. The WeChat application was originally born as a communication alternative to replace WhatsApp. It currently offers video games, bill payment, calling cabs or accessing financial system services, among other options. 

According to figures published by Dinero magazine, by mid-2019 WeChat had one billion users. Thanks to its massification, the use of cash has been discouraged and using the application it is possible to pay in large stores, buy products in informal commerce and even tip street performers. 

In order to consolidate this ecosystem, the fintech industry cannot forget the guiding principle that should characterize them: having the end user at the center of their product and providing solutions to the real problems of each context. In Colombia, a country so heterogeneous among regions and sectors, offering real solutions in rural and urban areas in the different corners of the country will be possible with innovation and the strengthening of an industry that has all the context in its favor to continue growing.