RAPT BizTrendsTV: Heidi Patmore – Digital wallets: A gamechanger

Heidi Patmore, the founder and managing director of Manjaro Marketing, a consultancy that specialises in launching and scaling tech startups across Africa, says that while digital wallets are not particularly ground break breaking, combining them with digital identity, crypto/ blockchain, and AI, is what will be the game changer, especially for Africa.

With half a dozen tech startups under her belt over the last five years alone, Patmore knows better than anyone how brands can ride the waves of emerging tech.

She says the demand and the driving force behind digital wallets and digital identities is coming from four places, which are converging to drive the innovation in this space.

These four factors are:

• Consumers: All economies are driven by what the end user needs.
  
• Government: Governments are seeing that the more they formalise digital identity and digital payments, the larger its concrete effect on driving the economy and jobs.
  
• Startups: By their very nature, startups bring an element of innovation to any space.
  
• Legacy brands: They have moved into this space because they're trying to change consumer behaviour.

She emphasises that while these four factors are doing this, it is consumers who are going to benefit the most as it gives them more access to the financial services that they need.

What is a digital wallet?

Digital wallets have been around for a while, but most people do not realise they are using a digital wallet.

A digital wallet can store and make payments in a digital way without anything physical, such as a card, cash or cheque, using a mobile device or an Internet-connected device.

There are also digital wallets you can use to store information, such as boarding pass information.

The one use of digital wallets most understood in the Western world is Apple Pay, Samsung Pay, and Google Pay. In Asia, they have WeChat Pay and Alipay.

Digital identity

Patmore says, think about why we need a digital identity. “It is a way to prove who you are and that you are who you say you are in a digital environment.”

She explains that logging in to your bank with a username and password is technically your digital identity.

“Without a secure digital identity, it's very difficult to check whether someone is who they say they are.

Integration of digital wallet and identity

Where digital wallets and identities are integrating is in the retail and e-commerce space.

“Walmart has a digital wallet that allows customers to verify themselves and store funds for when they shop at the store.”

She explains that this gives the store solid data on the customer.

Many brands are not using digital wallets per se, but a voucher system, such as gaming credits.

The gaming industry is particularly forward-thinking in this regard, as are brands in the financial and payment space.

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A trusted seamless CX

While there are opportunities in this space, there are also risks brands need to be aware of.

In the payments industry, brands need to be rock solid in their communications to consumers and how they interact with customers if their brand is to be trusted.

If a consumer trusts your brand, they're more likely to try an app with digital services, with a digital wallet and digital identity functionality.

If the app is glitchy and erases consumer trust, then it will get no traction because there is no trust.

Checkers Sixty60 is an example of an app that has built trust. Uber is an example of a bad user experience, with tons of trust.

Africa: the biggest opportunity

Digital identity and wallets impact in two markets.

One is in the more sophisticated markets, increasing digital payments to everyone in the population, which would be what we want in Africa.
In markets where you've got ubiquitous connectivity, you can have that.

But the barrier is connectivity, so the second market is the 76% of the continent that doesn't have Internet access, especially in rural areas.

But this is also the biggest opportunity on the continent.

One of her clients specialises in providing people who have never had an identity before with biometric digital identities, using a fingerprint, not a residential address.

"Your biometric identity is the same from the day that you're born to the day you die, and it's a cheaper method to register someone," she explains.

But the barrier is still Internet connectivity. however she believes we will see a massive improvement in connectivity and get the 76% down to five percent.

“What we see in an African country that gets ubiquitous connectivity from top to bottom is that the economy just shoots up.

“It is an overnight increase in economic activity, access to services, etc.

"Ubiquitous identity and transactions through digital wallets available to a billion people will unlock the entire continent. That would be a game changer. There is no other market in the world that's sitting on a billion potential market people," says Patmore.

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Brands in this space

While she says there is an opportunity for brands to expand into the continent, you need to have a strong understanding of what the market dynamics are in that specific market.

“Understand the market, do your market research, and go in with a strong understanding of how that market works.”

Also, understand the regulation in that environment, or the lack thereof, as well as the infrastructure.

There are also many players in this space. She suggests going the partnership route. “If you can partner with brands that are successful there and they're very open to it, you're more likely to succeed.”

Know there are risks.

“Even big players like MTN got clocked in Nigeria,” she says.

But for brands prepared to take risks, there is a big reward.

The future

It is difficult to predict anything, with the pace of innovation in technology, but she says it is this speed that will change things.

“I don't think we have any idea how fast things will change. But the exciting thing for digital identity and wallets is the convergence of these technologies.

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