Mobile wallet in India, its present and future
Adoption of modern digital payment methods is on the rise in India, partially fueled by its heavily smartphone-oriented population and partially by COVID, which has increased the importance of contactless payment for day-to-day transactions. This highlights a fascinating trend of how consumer retailer relation has not only survived but thrived during these hard times, thanks to this new form of digital payment.
Studies have shown that India leads the world in overall use of mobile payment especially in its own geographical region, that is maybe except for China whose payment system is somewhat closed and limited to the country. Surveys carried out in recent months have shown that an overwhelming 93% Indians have used a mobile wallet in the last year, which is well above the global average of 55%. It showcases their reliance on and acceptance of this form of payment method.
Not only that but it shows how safe and convenient mobile wallets have shown to be for Indians to accept them in such large numbers and in such less time. It is proved by numbers which state that in just last year mobile wallets have seen a 20% rise in adoption, just among Indians.
There are over fifteen different fintech companies operating in India right now. Both local and international companies are trying to corner India’s massive e-commerce market. Among the international players are titans like Google, Amazon and Facebook who have all launched their payment apps in India. Among local players there are giants like Airtel and Jio who are also trying to push into the e-commerce market.
But the most successful of all mobile wallets are Paytm, MobiKwik, PhonePe and Spay India. Some of these are older companies which have been operating in India for over a decade and others are newer startups who have seen considerable success in the last 2-3 years.
In another survey, results show that on average 50% Indians buy gift cards for their personal use. They have proven to be an effective mode of payment when shopping online and it’s not only limited to gift cards, as QR codes are being used more frequently by Indians with 85% reporting that it was one of their preferred methods when shopping online.
Impact of COVID
As mentioned before pandemic has been a major driving force behind the fintech revolution that is taking place in India. It has directly affected both the consumer and the retailer and changed the way they both interact with each other, as both have evolved to survive. Mobile wallets were around even before the arrival of COVID, but their use was very limited. But since the pandemic, over 94% of Indians have responded positively to using mobile wallets and other digital payment methods when shopping online and in person.
Over the last two years, the majority of the people have been combined to their homes, not only in India but the world. During this period delivery apps saw massive success as their use increased exponentially and not just to receive food but to get other goods delivered. So, retailers in India who were not yet part of the digital network, had to quickly adopt and those who successfully did that, gained more loyalty from their customers and gathered a huge consumer base. For small/offline retailers who were less tech savvy had more trouble adopting but many online apps focused on this issue and in the process not only increased their own network but also proved to be helpful for these small-scale retailers. Spayindia helped a lot in the offline retails system in handling payments.
Perspective on the future
Some believe that this reliance on online payment platforms will decrease and this trend of shopping online for everything will slowly die down as things get back to normal in post pandemic life. While others believe that this trend will only increase over time, as it was bound to happen in the future and pandemic only helped lower the time in which this happened.
When it comes to shopping online one cannot be sure how this trend will go in India but one thing that we can be sure of is that use of mobile wallets will increase even if not shopping online and a majority of Indians agree with it as 91% said that they would prefer to shop at a retailer who accepts a digital payments.