Digital Wallets – The Future’s Looking Even Brighter

28-oct

With the technological revolution that India has witnessed in the past decade, whole new concepts and innovations have flooded the market. Once deemed to be in the nascent stage, later touted to be the next big thing, now, it can be said that mobile wallets have truly arrived and the future is looking even brighter.

So what would be instigating the growth further in the digital wallet space? The first and foremost answer would be the internet penetration. India has transformed into the world’s second largest telecom subscriber base only after China with 993 million subscribers, of which 97 percent are mobile subscribers. Several telecom operators are now also aggressively investing to develop 4G networks to cash in the digital payment boom. The massive growth of internet usage on mobile has also played a pivotal role in laying the foundation for the growth of Digital Payments in India. Data has emerged as a key driver of mobile usage. A decade back, mobile subscriptions and revenue was also about voice and call related permutations and combinations. However, the scenario has completely changed. Voice revenues have decreased and data has become a key revenue stream. The surge in smartphone usage will further instigate the growth of the Digital Payment industry. According to the India on the Go: Mobile Internet Vision 2017 (A Study by KPMG-IAMAI), smartphone sales are expected to continue their growth trajectory in the Indian market at a projected CAGR of 53.8 percent from 2013 to 2017. So, how can we conclude that Digital Wallets will continue to grow at a rapid pace! Here are some recent developments that back the claim. An online survey by MasterCard in March revealed that smartphone shoppers in the country have been on a rise. Most of the transactions have been done using the digital wallets. Paytm, Freecharge and Citrus Pay have engrossed in a healthy competition in terms of heading the Digital Wallet industry. Here’s what Nitin Mishra, VP, Products, Paytm has to say about the exponential growth of the Digital Wallet industry, “We’ve seen exponential growth in wallets and a couple of months ago, and we crossed the 100 million wallet mark. We witness about 70-75 million transactions on the Paytm platform, and one-third are via mobile wallet.” Jitendra Gupta, Founder & MD, Citrus Pay, further added, “Citrus Wallet is growing 30-35% on a monthly basis for last 6 months. We process over 10 million transactions on a monthly basis. There is a significant increase in the number of people transacting using mobile phones. I expect this number to be around 70-75% in the next couple of years.”

These are exciting times for the Digital Payments industry in the country. Amidst witnessing the digital revolution taking over the country, the companies are happily smiling their way to the bank. And, this trend will continue in the coming years. Mobile recharges and bill payments on-the-go have been the most pivotal contributors to the Digital Wallet numbers. Moving forward than merely recharges, the Cab industry has also understood the importance of switching to the Digital Payments way. Various radio cabs are slow and steadily adopting the Digital Wallets. And, with RBI acting quick on the toes to support digital money, the industry is poised to witness way brighter (or I might say shinier times) in the near future. By 2017, Digital Wallets have the power to become a self-reliant ubiquitous ecosystem. The wallets will go further than payments along with experience cross brand partnering for a seamless shopping experience, splitting bills via same wallets, enabling notifying and tagging friends on social media and much more. In short, Digital Wallets will be the creators of powerful & engaging brand experiences in the coming months.

 

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“Thinking Aloud” reflects the emerging trends and varied outlook of the rapidly evolving internet and communication sector. An IAMAI publication, this is a part of the market education initiative of the association.


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