The Consumer Payments Insight Survey, published by GlobalData says that India is one of the top markets globally in terms of mobile wallet adoption with 55.4% respondents indicating that they have a mobile wallet and use it. India is followed by China and Denmark.
The adoption level in India is much higher compared to many of the developed markets such as the US and the UK, where consumers predominantly use cards. Mobile wallet transactions grew manifold in last five years.
The government’s demonetization move in November 2016 was a game-changer as it had led to a massive cash-crunch in the country as most of the ATMs dried up, compelling people to switch to electronic-mode of payments. While medium to large-value transactions continue to be made through digital banking channels, the low-value day-to-day transactions are carried out through mobile wallets.
The total value of mobile wallet transactions grew two-and-half times between 2016 and 2017. Initially considered as e-commerce payment tool, post demonetization, these wallets are now widely used for day-to-day transactions at supermarkets, grocery stores, street vendors, tea stalls, fuel stations, and even inside taxis and auto-rickshaws.
Mobile wallet has become a mainstream payment instrument in India. GlobalData’s survey shows that the share of cash or cheque (cash on delivery) in total e-commerce transaction value declined from 31% in 2013 to 16% in 2017, whereas the mobile wallet share jumped from just 7% to 29% during the same period. The usage of payment cards dropped from 38% to 32% during this period.
With intensifying competition in the Indian mobile wallet market, providers must remain competitive, in order to do this they are focusing on value-added services. These wallets encompass additional services such as utility bill payments, mobile top-up, hotel/airlines bookings, buy entertainment tickets, and even gold purchases. Some of the wallet providers such as Paytm and Airtel have begun to move to other sectors to offer banking services, after receiving the approval from RBI.
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