Learning Objectives:

  • Understand the rise of digital wallets and their role in the payment ecosystem.

  • Analyse mobile money services and their role in financial inclusion.

  • Explore emerging payment models: Buy Now Pay Later (BNPL), embedded finance, and peer-to-peer lending.

5.1 Digital Wallets and Their Ecosystem

The RUDN University course covers “mobile payment systems” and “digital wallets” as core topics . The IBS programme covers “Mobile applications: QR codes and digital wallets” .

Types of Digital Wallets:

  • Bank-Provided Wallets: Wallets issued by banks and integrated with existing bank accounts.

  • Fintech Wallets: Wallets issued by technology companies (e.g., PayPal, Venmo).

  • Big-Tech Wallets: Wallets issued by large technology companies (e.g., Apple Pay, Google Pay).

Wallet Functions:

  • Store payment credentials.

  • Enable contactless and online payments.

  • Provide transaction history and personal financial management.

5.2 Mobile Money and Financial Inclusion

The Uphilos Consultancy course covers “mobile money services” as part of its digital payments infrastructure curriculum . Mobile money services have been a key driver of financial inclusion, particularly in emerging markets.

Key Features of Mobile Money:

  • Payments via mobile phone, often using USSD or mobile apps.

  • Can be used for person-to-person transfers, bill payments, and merchant payments.

  • Often integrated with agent networks for cash-in and cash-out.

5.3 Emerging Payment Models

The SMU Academy module explores “the evolution of digital payments and credit systems, with focus on ‘Buy Now, Pay Later’ schemes” . The Wharton-Visa programme covers “embedded finance” as a key theme .

Buy Now Pay Later (BNPL):

  • Short-term financing at the point of sale.

  • Allows consumers to split payments into instalments.

  • Has grown rapidly in popularity, particularly in e-commerce.

Embedded Finance:

  • The integration of financial services into non-financial platforms.

  • Examples include checkout financing, in-app payments, and insurance integrated into ride-hailing apps.

Peer-to-Peer Lending:

  • Platforms that connect borrowers directly with lenders.

  • Bypass traditional financial intermediaries.

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