WalletsClub wants to end wallet silos

FACTS

Make all the wallets on the market interoperable and end the segmentation of offers. This is the challenge that WalletsClub has set itself.

•  Since its creation in China in 2019, WalletsClub has sought to establish itself as a reference operator for private mobile wallets, not by offering yet another such solution, but by making all those currently available interoperable from a single platform.

• WalletsClub thus assumes the role of a clearing house for these private players, making their transactions interoperable with each other, regardless of the geographical area.

• Users of different wallets are thus able, via WalletsClub, to pay each other. WalletsClub is in charge of making these exchanges possible, as an intermediary of financial transactions, thanks to the ISO 20022 standard.

• Business model: WalletsClub plans to monetize its offer by charging a fixed fee on each transaction made through its service.

• The FinTech has set a profitability target that could be reached if it convinces about twenty mobile wallet operators and performs several hundred daily transactions.

CHALLENGES

•     Fighting against the fragmentation of the mobile payment market: Thanks to the interoperability of e-wallets, even small players could thrive because they are compatible wherever the WalletsClub clearing system is installed. But mobile wallets are as numerous as the players behind them are varied. Mobile operators, Western and Eastern Tech giants, merchants, FinTech and other conglomerates of incumbent financial players are all looking to enter this high potential market.

•     This initiative is a reminder of the extent to which interoperability is a key element in the distribution of a mobile payment service. It is also the issue that is behind major initiatives such as UPI in India.

MARKET PERSPECTIVE

• According to a report published by the GSMA, the industry association for mobile network operators, there were more than 300 mobile payment service operators with more than 100,000 active users at the end of 2020 worldwide, representing more than 300 million active mobile payment accounts.

• However, despite their critical size, even the largest players in this market are facing limitations. This is the case for Alipay, for example, whose one billion users cannot use its service outside of China.

• The creator of WalletsClub, Xue Zhixiang, knows the problem quite well as before launching his start-up, he was working at Alibaba on the Alipay's cloud infrastructures department.