Sooner or later your mobile phone will take over your wallet. With more knowledge about mobile payment system and deeper penetration of mobile wallet services, large number of people are likely to shift to the digital wallet system enabled by mobile phone operators. As major players in the mobile wallet segment in India are busy in introducing mobile payments to brick-and-mortar stores in the country, the sector hopes for a bigger business pie. When more brands/companies tie-up with mobile wallet service providers a customer can spend days without the original wallet in his/her pocket.
With the recent announcement of MobiKwik to provide small ticket size loans to the people, the segment becomes even more vibrant.
The major players in the space are Paytm, MobiKwik, FreeCharge, PayUMoney and Oxigen.
The industry expects many more to come. Now, the Reserve Bank of India (RBI) rules limit digital wallets to Rs 10,000 without a Know Your Customer (KYC) norms.
The next big thing in the mobile wallet segment will be the increase in transaction limit (already companies are batting for the same).
“There is a massive and unparalleled opportunity lying before us. With 95 per cent of the transactions in India still being powered by cash and with more than 70 per cent of our population still unbanked, we have before us a great opportunity to change the financial landscape of the country. The mobile wallet segment is already changing how India transacts and believe that in another 3-5 years it will become the default payment instrument replacing cash,” said Bipin Preet Singh, Founder and CEO, MobiKwik.
The ambition of these companies is justifiable considering the fact that about 15 crore smartphone users exist today and the number is expected to grow to 50 crore in the next five years. Services like paying bills, phone recharge, pay for food, travel and cabs, shopping, entertainment and e-commerce payment can be availed off using the mobile wallet.
Moving a step forward customers now want to do hotel, flight bookings and even an apartment booking through mobile wallet, but the Rs 10,000 limit remains a hurdle. According to Bipin Preet Singh mobile wallet providers have a larger role to play as out of the over 50 crore debit cards issued in India, only about 10 per cent of them are actively used for making payments.
“The mobile wallet segment is growing fast in the country. Even though there are only a few players in existence now it is likely that more companies, including medium and small size ones, will enter into the market. This is because India is a big market and there is scope for more players,” said V N Sastry, Executive Secretary, Mobile Payment Forum of India.
KYC is the next big thing for the players in the segment as they want to verify customer details like address, identity to increase the digital wallet limit to Rs 1 lakh per month.
Says Nitin Misra, Vice-President, Paytm: “The use of mobile wallet is expanding beyond just paying bills and hence the limit acts as a hindrance for further growth. MobiKwik is planning to launch Aadhaar verified eKYC soon.”
Sastry says as more innovations are in the pipeline by many companies, coming years mobile wallet may replace some cash payment modes in the country.