The infant mobile wallet market in India is estimated to grow over three-fold to Rs 1,210 crore in the next five years, buoyed by rising smartphone users and entry of newer players into the sector.According to a study by research and consultancy firm RNCOS, the current Indian market size for mobile wallet (m-wallet) stands at about Rs 350 crore and is estimated to rise to Rs 1,210 crore by 2019. “M-wallet market is projected to grow at a CAGR of around 30 percent in the next five years from 2015-2019. This is mainly due to increase in the demand for smartphones, which is estimated to grow at a higher pace, and rising mobile internet users, which has grown at 92 percent in 2013,” RNCOS said in the report. Also Read - Digital India: Government allots e-payment targets to ministries and states
Any smartphone user can install m-wallet application in the handset and can create own log in account. They will get a permanent pin number for utilising m-wallet services. RNCOS said: “M-wallet has a high capacity as an alternative to traditional and current payment systems in India. Growth observed in m-commerce sector in India has moved its payment systems to mobile devices.” Also Read - Is mobile wallet a distant dream in India?
Some other reasons attributed to the high growth of the segment include higher working population engaged in banking and online purchasing of products, discounts offered by firms to attract customers in festive seasons for purchase through m-wallet and expansion of service portfolios by the companies. Market of m-wallet segment includes transferring of money, services related to banking transactions, value added services such as shopping, ticketing, recharging and bill payments, the study pointed out. In the segment, the highest 38 percent market share is captured by money transfer businesses, followed by recharge and bill payments and utilities areas by 30 percent and 12 percent respectively. Others enjoy 20 percent market share.
Despite its promising future, the m-wallet segment is facing challenges in India such as alternative money transfer channels, lack of awareness, stringent policies on restriction of cash-out facility, low margins and poor internet connectivity in many areas, the study said. Some of the major m-wallet players are Airtel Money, mRupee, Vodafone m-Pesa, Oxigen Wallet, Paytm, Mobikwik and Idea Money.