With advancement in technology, things around us have changed drastically. Technology caters to man’s comfort and convenience. With the help of your smartphone, you can do everything. Be it ordering food or groceries, booking a cab or movie tickets, etc.
With the introduction of Mobile Wallet, it has become extremely convenient for a person to make cashless transactions. And although a number of companies have cropped up in India, offering consumers this product called ‘mobile wallet’, there is still a lack of awareness among people about the concept and its utility.
What is a mobile wallet?
Mobile wallet is the digital equivalent to the physical wallet in which we carry money. It is an online platform which allows a user to keep money in it, just like a bank account.
A user needs to make an account with a mobile wallet provider. After which money is added to the ‘mobile wallet’ account using a debit, credit, online transaction from bank account or via cash (a recharge kiosk).
The main difference between a mobile wallet and online transactions via bank account is that, unlike banks mobile wallet does not charge any amount of money on every transaction and saves the customer from the hassle of entering card details and pin number for each and every transaction.
It is easy and convenient as the user just needs to sign in the account and make the payment.
Some of the mobile wallet providers are Paytm, Citrus, Oxigen, Freecharge, Mobikwik, Zaakpay, ItzCash etc.
Why is Mobile Wallet Adoption Less?
“Mobile wallet is a recent phenomenon. Its adoption will take time as it is a habit change experience for users as they are migrating from cash to wallet experience,” said Jitendra Gupta, MD and Founder of Citrus Pay.
Even though it might be a relatively a newer concept, the adoption is increasing along with the awareness of it. As Mobikwik, Social Media Head, Ajit Narayan said, “Over the last financial year, MobiKwik’s user base has grown by close to 300% and has reached over 15 million now. One has to realise that this also like internet 20 years back is new technology and hence will have a ‘warming up’ period. However, the pace will be much faster and we are already witnessing some disruptive growth. We expect all of the 900 million phone users in India to eventually start making payments using their device and via a mobile wallet.The primary drivers for this would be education & awareness about the concept driving fast adoption.”
Paytm in less than 15 months of launch has achieved 50 million mobile wallet users with more than 16 million unique transacting wallets in a month. And it plans to acquire 100 million mobile wallets by the end of 2015.
Amit Lakhotia, Vice President, Paytm said, “Mobile wallet adoption is growing rapidly in india and people are becoming more and more comfortable using the same. Consumers are becoming comfortable saving their cards and keeping money in these wallets. We now have more than 20000 merchants where the user can pay with paytm wallet.” Further talking about its adoption he said, “This being a new product, consumer education is important. We are making it easier for consumers to use wallet at more locations. Till now we have focused a lot on online merchants and now we are expanding the scope to include the offline merchants as well. Similarly we are also making it easier for users to add money in wallet using cash as well.”
Mobile Wallet target audience is mainly young tech savvy people. It could be an existing banking customer or an aspirational rural consumer who wants to transact digitally.
Udit Sharma, Vice President, Oxigen said, “Users can be classified into four categories. First category is of people who have credit/debit cards and are at ease using that mode of payment. Second category people who have cards but still prefer using COD. Third category is people who do not have cards, so they have to use COD. And the fourth category is of people who want to use COD but merchants do not deliver products to their pin codes. Mobile wallets addresses issues of all four categories of people. It caters to users convenience over using cards. Availability of a person to make COD is mandatory, however with the wallet this problem also gets solved. It a tough pull for the industry to get all COD users to mobile wallet but ultimately it holds an immense scope.”
Roadblocks in mobile wallet adoption?
RBI has been a pro-active thinker to drive adoption and has been very liberal in issuing licenses. Policies are decided and implemented by the The Reserve Bank Of India (RBI). The RBI has been very responsive over the past 2-3 years, bringing in key changes such as increasing the limit of how much money a user can park in the wallet, allowing wallet to wallet money transfers, and direct fund transfer to bank accounts.
How are customers benefiting from this?
Convenience and speed of doing the transaction are the key benefits. Mobile wallet users enjoy greater flexibility in making secure payments. The convenience of making payments on the go and easy accessibility of this new mode of payment makes it a logical and natural choice. Additionally, those who don’t have a credit card or a debit card can go to their nearest wallet recharge kiosk and get their wallets loaded against cash.
“Mobile wallets can do everything that cash or card can do and way better at it,“ says Ajit Narayan.
What is mobile wallet’s future?
Mobile wallet will play a significant role in day to day life as an increase in use of smartphone can be seen and people are relying on digital lifestyle to make things convenient and fast.
During 9th India Digital Summit 2015, IAMAI, Udit Sharma, Vice President, Oxigen said “There is no doubt that mobile wallets will take off. Coming from Oxigen our philosophy is that we don’t hold the right to call ourselves a mobile wallet unless we replicate all the functionality of a real physical wallet. A mobile wallet should address its users as well as merchants needs (such as convenience, security concerns and a merchant-user end to end relationship), only then will there be a true adoption of wallet in this country.”
Bipin Preet Singh, Founder and CEO, Mobikwik, during the same summit said, “There are two primary factors for mobile wallet adoption. First is that banks have not done a great job in terms of technology or premium infrastructure so there is a need and space for alternative systems like mobile wallet to emerge. Second factor is that India is a cash majority country and there is huge scope in getting the cash converted into digital money.”
Although there is not 100% penetration of mobile wallet yet, it still holds immense potential. As per a McKinsey report, presently number of smartphone users in India is 29 million. As per IAMAI report, number of mobile internet users is expected to reach 213 million by June 2015. Therefore to avail the service of a mobile wallet a user should have a smartphone and then internet connection. To fuel mobile wallet adoption, companies have even opened offline stores where people who do not have credit/debit cards can pay and recharge their accounts. Therefore, attempts are being made across industry for mobile wallet awareness to get as many users as possible.