March 3, 2023
We are going to focus on numbers: how much time and money you will need to create a digital wallet.
Long gone are the days when cash was the number one means of payment. Today, cashless payments are taking overYou can pay for almost anything by using credit/debit cards or e-wallets. The latter payment method is getting more and more popular every day. E-wallets are fast, efficient, and secure, so people are learning to trust them with their finances.
The market already has several pre-built solutions like PayPal, Cash App, Google Pay, Samsung Pay, and Apple Pay—and we have not even listed the many closed-loop wallets limited to one merchant and small niche wallets. However, although there is market competition, that doesn’t mean you don’t have an audience to target; there are plenty of industries in need of payment solutions.
How much will such an initiative cost? Well, we have the answer. In this article, we will discuss the factors that influence e-wallet development costs and the final project budget.
Let’s start with a more detailed definition of an e-wallet app. An e-wallet, or a digital wallet, is a financial technology that stores users’ financial information in one secure location and helps them make cashless payments. E-wallets can also hold multiple types of digital assets like cryptocurrencies, loyalty points, digital coupons, and more. It works as a platform for managing different assets in a secure and easy way. Some e-wallets offer options to exchange or convert assets from one wallet to another.
E-wallet providers can offer additional features, such as purchase tracking, budgeting tools, and account management options, making them a convenient and flexible way to manage personal finances.
Let’s look at the most popular mobile payment technologies that have made digital wallets more convenient for users around the world.
NFC stands for Near Field Communication. Thanks to this wireless communication technology, devices can exchange data over short distances, typically within a few centimeters. The technology is widely used in mobile applications, making it possible for consumers to make secure and fast contactless payments using their smartphones or other NFC-enabled devices.
Bluetooth and iBeacon
Bluetooth and iBeacon are both wireless communication technologies that can be used for mobile payments. Bluetooth is a technology that helps devices communicate with each other wirelessly over short distances, and iBeacon is a specific implementation of Bluetooth that was developed by Apple. It’s often used in mobile apps that allow payments to facilitate communication between a smartphone and a point-of-sale (POS) system.
To use a QR code for payment, the user simply needs to scan the code using their smartphone's camera and enter the payment amount. The payment can then be authorized and completed using an e-wallet app or a bank's mobile app. Payments via QR code can be used for retail purchases, paying bills, and person-to-person transactions. One of the main advantages of QR code payments is that they are very fast and easy to use, requiring only a few taps on a smartphone’s screen. They are also very secure, as the user's payment information is encrypted and transmitted securely.
One of the fastest-growing future trends in fintech, in general, is blockchain. Payments here are made using both traditional money and cryptocurrencies, such as Bitcoin, Ethereum, or Ripple. These digital currencies use blockchain technology to create a decentralized network that enables P2P transactions without the need for a central authority, like a bank or government. This eliminates the need for intermediaries, resulting in lower fees and faster processing times.
So, you’ve decided to build a digital wallet. One of the most important parts of the preparation for a long and complex development process is building your budget. The exact amount of money you need and the possibilities for cost reduction will depend on many factors. Let’s discuss the most influential.
The team composition will impact the cost of developing a digital wallet app. A larger team, or one with specific technical expertise, may cost more than a smaller and less experienced team. The possible team members may include the following:
Here are the possible options for a team composition that can work on your app. The final list of team members will depend on the features you want to implement.
Small team: A small team includes one to three software engineers, one designer, and a project manager.
Medium team: A medium-sized team includes four to six engineers, up to two designers, a project manager, a business analyst, and a QA engineer.
Large team: A large team consists of eight and more engineers, two to three designers, a project manager, a business analyst, and a QA team.
Specialized team: Consists of a team that is specialized in specific technologies or fields, like blockchain and cryptography.
It's important to keep in mind that even after the development is completed, there will be ongoing costs for maintaining and updating the app, providing customer support, and dealing with unexpected issues. Feel free to consult with us to get a detailed quote for your specific project and a better idea of your budget.
If you work with Yellow, a team of any size will have team members that have relevant experience in the domain to ensure your digital wallet addresses all your needs.
The development team’s location can have a significant impact on the cost of development. Generally, the cost of development will be lower in countries where the salaries are typically lower, while it will be higher in countries with higher salaries for developers. Also, the hourly rate may vary from team to team in the same region.
Here are some rough estimates of the cost of developing a digital wallet app based on the location of the development team:
When it comes to developing a digital wallet app, there are several technologies that are commonly used by almost any team. They will provide you with the necessary level of scalability and flexibility. These technologies can include:
iOS: Objective-C, Swift
Android: Kotlin, Java.
Cross-platform development: React Native, Xamarin, Flutter
Backend: Python, Node.js, Go
Database: MySQL, MongoDB, PostgreSQL.
Security: SSL/TLS and token-based authentication
Payment gateways: Stripe, Braintree, PayPal
Cloud infrastructure: AWS, GCP, Azure
The specific technology stack will depend on the project’s requirements and the goals of the development team. Some projects may require additional technologies or services to be included in the stack, like blockchain or chat solutions. The final cost of this part will depend on the tech stack you choose.
Third-party integrations can significantly impact the digital wallet development costs since integrating additional services often requires more development work and resources.
For example, if you want to integrate a payment processor into a digital wallet, you may need to build custom APIs and software to enable communication between the two systems. Similarly, if you want to create a loyalty program or a rewards platform, you may need to develop custom code to ensure that the two systems can communicate and share data.
The cost of these integrations can vary depending on the complexity of the integration, the amount of custom development work required, and the fees charged by the third-party service provider. Additionally, ongoing support and maintenance costs may also be required to ensure that the integration continues to work properly.
Developing a high-quality user interface and user experience (UI/UX) involves knowing the needs and preferences of users, designing interfaces that are easy to use and visually appealing, and ensuring that the user experience is consistent across all devices and platforms. This process usually starts with creating wireframes, prototypes, and visual design mockups, as well as extensive user testing to ensure that the interface is effective and engaging for users. The design system is then created, and the whole platform/website is drawn.
The cost of designing and implementing a quality UI/UX design can vary depending on the level of complexity and the amount of time and resources required. High-quality design adds time and resources to the app development process and requires the skills of specialized designers and developers.
Another factor that will play a significant role in estimating the development cost is the feature list you want to implement. Below we have listed several features your app will definitely need. However, it doesn’t mean you need to implement them all at once. We strongly recommend you start with a minimum viable product (MVP) and test your idea before building a full-fledged solution. Then, you can add more features based on user feedback.
Before we start describing features related to user roles, we need to mention two things that will be relevant to the app as a whole.
Implementing advanced security features, such as encryption and secure data storage, is a must for a digital wallet solution to protect user data and prevent fraudulent activities. For example, an e-wallet must have a secure login system that ensures that only the authorized user can access the account and view the stored information. Also, the app should have an option for two-factor authentication, providing an extra layer of security for users. Unfortunately, these features will increase the cost of development.
Online payments and digital wallets are not new to users. If you want to enter the market with a unique solution, we are here to help.Learn more
Depending on the country, region, and industry where the e-wallet operates, you might have to comply with various regulations and laws, like AML (Anti-Money Laundering), KYC (Know Your Customer), and others which might incur additional costs for compliance services and solutions.
Now, let’s talk about user-specific features that make up the core of your app:
Online receipt: The digital wallet app should provide users with online receipts for all transactions they make. They can be accessed and stored right in the app.
Linking of payment methods: Users should be able to link various payment methods to their digital wallet app, like bank accounts, credit cards, or other online payment options.
In-app payments: Users should be able to make payments directly from the digital wallet app to merchants or other individuals without the need to enter payment details every time.
Transaction history: The app should keep a record of all transactions made by the user, including the amount, date, and merchant details.
Budgeting and spending tracking: The app can include tools to help users track their spending and set budgets, with alerts for when they are nearing their limit.
Rewards and cashback: The app can offer rewards and cashback to users for making payments with the digital wallet to encourage them to use the app more frequently.
Personalization: The app should offer personalized recommendations and deals based on the user's transaction history and spending habits.
Payment processing: The app should allow merchants to accept payments from customers using the digital wallet app, with fast and secure payment processing.
Invoicing: The app should provide tools for merchants to create and send invoices to customers, with options for customization and automated reminders for overdue payments.
Reporting and analytics: The app should provide detailed reporting and analytics to track sales, revenue, and customer behavior, with the ability to export data to other tools.
Loyalty program builder: The app could offer features to help merchants create and manage loyalty programs, with discounts, rewards, and incentives for customers who use the digital wallet app to make purchases.
Integration with existing systems: The app should be able to integrate with other systems that merchants use, such as point-of-sale (POS) systems, accounting software, or inventory management tools.
User adoption and merchant management: The app should allow admins to manage user and merchant accounts, with options to view and edit user details, approve or reject merchant applications, and manage access permissions.
Payment processing: The app should provide tools for admins to manage payment processing, with options to view and track transactions, resolve disputes, and issue refunds or chargebacks.
Marketing and promotion: The app could offer features to help admins promote the app to users and merchants, such as targeted advertising or special deals and discounts for new signups.
Customer engagement and retention: The app could offer features to help admins engage and retain users, such as push notifications, in-app messaging, and personalized recommendations based on user behavior and spending patterns.
Here are some rough estimates of the cost of developing a digital wallet app based on the feature set:
|Simple e-wallet app/MVP||A basic digital wallet app that can store credit card information and perform basic transactions||$50,000–$70,000|
|Advanced digital wallet||An advanced digital wallet app that includes features like loyalty program integration, analytics, and data insights||$70,000–$120,000|
|Complex e-wallet app||A complex digital wallet app that includes features like Blockchain integration, real-time payment processing, and biometric security||$120,000–$300,000|
It's important to note that these are rough estimates based on one dimension, and the actual cost can vary depending on all the factors we have discussed.
The cost of developing a digital wallet can vary depending on a number of factors, including the type of digital wallet, the features and functionality that are included, and the company or developer you choose to work with.
The cost of a simple digital wallet containing only basic features, such as storing credit card information, basic transactions, and security protocols, can range between $40,000 to $80,000.
If you want more advanced features such as loyalty program integration, analytics and data insights, and geolocation-based push notifications, the cost can range between $80,000 to $180,000.
For complex digital wallets, such as those that integrate with other systems, like blockchain, or wallets that require high-level security and encryption, the cost can range between $200,000 to $300,000 or more.
It's important to keep in mind that developing a digital wallet is a long-term investment, and the costs will be spread out over the development timeline, rather than a one-time expense.
This article should have helped you gain a better understanding of mobile wallet app development. However, you need a reputable e-wallet development company to create a reliable digital payment solution and provide you with relevant cost optimization strategies. Feel free to drop us a line and get a detailed estimate of YOUR idea.
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👛 What is an e-wallet?
👛 What are the main factors that influence the development process?
👛 How much does it cost to build an e-wallet?
👛 Who can use digital wallets?
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