Branded Digital Wallets: 80% of Merchants Haven't Got One Yet

01 /The Concept

Ansa wants merchants to "unlock the potential of their best customers" – which in practice means two things:

- identifying which shoppers are likely to become loyal buyers, and

- giving merchants a tool to keep those shoppers engaged and spending.

The mechanism is a branded digital wallet. Merchants set up a wallet on Ansa's platform and connect it to their store; customers can then pay with funds they've loaded themselves, or with rewards the merchant has credited to them.

The self-selection here is intentional. Customers who bother to open a wallet and fund it are signaling that they plan to keep coming back. That's the segmentation working before any data analysis even begins.

Once a customer has money in their wallet, there's a natural pull toward spending it. The merchant can now send targeted offers – prompting the customer to use those funds on a specific purchase. And by crediting a reward after each transaction, the merchant ensures there's always something left in the wallet, maintaining that pull.

All wallet functionality is exposed through Ansa's API, so merchants can embed wallet-loading and wallet-payment buttons anywhere: their own website, a mobile app, any other sales channel that supports API calls. The same goes for reward credits – the entire reward logic can be automated, whether built from scratch or layered on top of an existing loyalty program. A simple implementation might just double all existing loyalty rewards for wallet holders.

The platform aggregates wallet activity into analytics dashboards, helping merchants understand the relationship between promotions, rewards, and wallet usage – and use that insight to increase purchase frequency and transaction size.

Wallet balances need to be reflected in merchant accounting. That's normally extra hassle. Ansa includes tooling to automate the reconciliation of wallet activity into standard accounting reports.

The startup's initial target market is cafes and quick-service restaurants, where customers make small, habitual purchases. One cafe client reported a 30% increase in transaction volume and a 26% revenue lift on the same customer base after introducing the wallet system. Revenue grew more slowly than transaction volume because some of that revenue funded rewards.

Ansa has since set its sights on marketplaces as well, though there are no published case studies from that segment yet.

Founded in 2022 and launched in early 2023, Ansa raised $5.4M at launch. The startup says wallet holder counts doubled in Q1 2024, which prompted the current raise: $14M, a year after the previous round.

02 /Why It Matters

The wallet concept is reminiscent of what happened with mobile apps. Every merchant – and eventually every website owner – felt compelled to build a mobile app just to get onto customers' home screens. If the app is there, they'll use it.

That strategy worked, and it still does. Install count and download rate are key marketing metrics for most B2C services for a reason.

In that sense, wallets are the new apps. A merchant that convinces a customer to load $20–30 into a branded wallet has created a powerful psychological pull: that money is sitting there, and it wants to be spent. The merchant's job is then to top it up with rewards after each visit, so there's always something left.

Branded wallets aren't a new idea – some merchants have offered them for years. What's changed is that adoption may be about to go mainstream in the same way apps did. And platforms like Ansa let merchants launch their own wallets without any engineering overhead.

Here's the more structural reason merchants will want this, though: payment processing fees.

Most retail transactions now go through debit or credit cards. In the US, cards account for roughly 60% of retail spending. But card networks and payment processors charge interchange fees on every transaction – and in the US, those fees sum to an eye-watering $138B per year. That makes interchange the second-largest operating expense for retailers, right behind payroll.

The math gets especially punishing on small tickets. A $4 cup of coffee might carry a 12.5% effective processing fee.

A digital wallet flips this dynamic. Customers typically load the wallet in larger increments – $25 or $50 at a time – so the processing fee is spread across many transactions. The per-purchase effective rate drops substantially. Ansa takes its own cut on wallet activity, but the net cost to the merchant is still meaningfully lower than card processing on individual small-ticket purchases.

03 /Opportunities

The direction here is straightforward: build an Ansa equivalent and position for the coming wave of digital wallet adoption among merchants.

If it seems like digital wallets are already everywhere and every merchant already has one – that's a perception bias. Technologically early adopters, people living in major metropolitan areas, and people who frequent forward-thinking venues tend to assume the mainstream has caught up. It usually hasn't.

In most markets, 80–90% of the potential user base still lags behind on technology adoption by years. Regional and category variation is significant.

A useful parallel: a [recent review](/review/dumaete-u-vseh-jeto-uzhe-est-oshibaetes) covered Durable, a Canadian startup that built a simple website builder for micro and small businesses. In its first year, 6 million websites were created on the platform – because despite the assumption that everyone already has a website, most small businesses still don't. Durable raised $20.25M.

The digital wallet opportunity may be even larger. The timing to enter is good, the model is validated, and the template is in front of us.