Kent Henderson, VP Product Management at Mangopay, explains why in-app wallets are no longer just a way to pay – they’re becoming the central infrastructure of modern platforms and marketplaces. In-app wallets are transforming platform economics, boosting loyalty and unlocking new revenue streams far beyond traditional payments.
How are in-app wallets redefining the platform model beyond payments?
Historically, payments have been treated as an operational necessity and merely seen as something that happens at the end of a user journey. But that’s changing fast. We’re now seeing in-app wallets become the foundation of value creation across modern platforms and marketplaces.
At their core, wallets connect every participant in a platform’s network, from buyers to sellers and service providers, allowing funds to move instantly and securely between parties. This closed-loop model keeps value circulating within the ecosystem, enabling platforms to manage money flows in a more flexible way while reducing friction.
For users, they can benefit from faster access to earnings, instant refunds and integrated loyalty rewards. For platforms, wallets are fast becoming the reason users return, driving engagement, trust and long-term loyalty. Our research shows that 41% of UK wallet users now prefer refunds directly into their wallet and over a quarter (26%) use their wallets to collect rewards and loyalty points. That shift signals that wallets influence how money moves as well as the factors that drive user loyalty.
What makes in-app wallets a differentiator for multi-party platforms?
Multi-party platforms are complex by nature as you’re dealing with multiple user types, currencies and regulatory frameworks, often across several geographies. That complexity can create friction if it isn’t well handled.
Wallet-based infrastructures solve that challenge by enabling money flows to follow each platform’s specific business logic. They allow platforms to manage pay-ins, hold funds securely and orchestrate payouts, all within a compliant, transparent framework. That level of agility becomes critical during high-traffic periods, when performance and trust are on the line.
This is a significant step change, especially for platforms that operate across borders. Wallets simplify localisation, FX and reconciliation, giving platforms full visibility and control over how funds move through their ecosystem. By embedding that flexibility directly into their payment architecture, platforms can scale faster and deliver the kind of frictionless experience users now expect as standard.
As we enter the Golden Quarter, how can wallet-based infrastructures help platforms capture and retain spend?
The Golden Quarter is e-commerce’s most competitive period – a time when conversion speed, reliability and customer experience can make or break a platform’s performance. For marketplaces and platforms, the challenge isn’t just attracting spend, it’s keeping it.
Wallet-based infrastructures remove friction at every stage of the transaction. They allow users to pay, receive and reuse funds instantly, turning what would have been one-off purchases into repeat engagement. This creates a seamless experience during peak season and builds habits that last well beyond it.
Refunds paid into platform wallets keep funds within the ecosystem, making it more likely that users will spend their refunded balance on the platform again. Real-time payouts mean sellers and service providers can access earnings immediately, which is a crucial trust driver, particularly when transaction volumes spike. As wallets sit at the heart of a platform’s ecosystem, they also make it easy to roll out seasonal incentives or cashback offers without relying on third-party systems.
Wallets also make it easier for platforms to localise payments for global users. Through multi-currency virtual accounts, platforms can let buyers pay and sellers get paid in their local currency, without adding extra steps or intermediaries. This localisation improves the checkout experience and builds confidence among cross-border users who want payments to feel local, wherever they are.
This combination of speed, control and flexibility turns peak-season demand into long-term loyalty.
What’s driving the adoption of in-app wallets among platform users?
We’re witnessing several forces converge to accelerate wallet adoption and it starts with consumers. Convenience is now the baseline and consumers want more. They want control, transparency and tangible value from every transaction. Wallets deliver all three, putting users in charge of how they spend, earn and save in one place.
The second driver is the embedded finance revolution. Platforms are no longer just facilitators of payments, but they’re embedding financial services into the experience. Wallets are fast becoming gateways to richer features like cashback, loyalty rewards, savings pots and budgeting tools, all within a single, trusted ecosystem.
Finally, macroeconomic pressure is reshaping consumer behaviour. People are thinking more deliberately about where and how they spend. Eighty-seven percent of UK adults identify the cost of living as one of the most important issues facing the country, according to the Office for National Statistics (ONS). Far from being just a convenient way to pay, in-app wallets are emerging as powerful financial tools. Over a quarter of users (26%) collect loyalty points or rewards, 44% earn money through digital platforms (rising to 67% of 16–24-year-olds) and 41% even prefer refunds paid directly into their wallets over their bank accounts. That tells us that wallets aren’t just convenient; they’re also helping users make smarter decisions while giving platforms a powerful new way to create loyalty.
How can marketplaces and platforms use wallets to unlock new revenue streams and deepen customer loyalty?
Wallets give platforms a clear route to unlocking new economic models. By embedding wallet functionality, platforms can introduce entirely new monetisation layers like loyalty schemes, premium wallet tiers, instant credit or FX margins. These options simply aren’t possible with traditional payment setups.
Every wallet interaction becomes a moment to deliver value, whether through cashback, faster access to funds or exclusive offers. Our research shows nearly half of UK wallet users (44%) are motivated by loyalty rewards, underscoring just how powerful that incentive can be.
Critically, wallets also give platforms a new kind of visibility. They generate data-driven insight into spending patterns and user behaviour, allowing platforms to fine-tune incentives and strengthen engagement. That feedback loop fuels retention and trust, turning wallets from a simple payment layer into the heartbeat of loyalty and growth.
Looking ahead, how do you see the next generation of in-app wallets evolving?
The next generation of in-app wallets will be defined by intelligence, personalisation and trust. We’re moving into a phase where wallets will do more than just process payments – ultimately, they will understand users. Platforms will use data to tailor experiences in real time, from personalised rewards to smarter spending insights, making every interaction feel more intuitive.
We’ll also see greater connectivity across ecosystems. As the platform economy matures, interoperability will become essential to allow users to move value between platforms and services while maintaining the same high standards of compliance and security.
