The hotbed debate on emerging online shopping preference has surely got a conclusion betting upon the rise of eCommerce scenario in the country lately. The millennial consumers and their shopping behaviour have clearly indicated that marketplaces are the next ‘bazaar’ for them. Be it clothing, be it electronics or grocery, consumer today wants everything to be available on their fingertips. With berserk smartphone and internet penetration across the country, online shopping is aggressively getting into the DNA of Indian shopping. This phenomenal growth in online shopping has ignited a colossal demand in the online payment industry too. As smartphones are rapidly outdoing other shopping methods, the online payment industry, too, is moving in the same direction.
Banking upon the UNBANKED!
The term ‘digital’ is all about smartphones today and thus online payment is drifting towards mobile payments. Though the mobile payments form a diminutive part of the overall online payment industry, but the trend is likely to splurge up in the years to come. Studies suggest that the contribution from phones and tablets is expected to increase by 30 per cent by the year 2020 with a growth of $86 million in 2011 to $1.5 billion in 2016. Betting on the fact that India is home to the largest number of unbanked families (more than 145 million), many mobile wallet companies are eyeing to tap this unorganised consumer base. Not just these digital payment solution providers, but additionally retailers, both online and offline, have supported mobile payments as a preferred mode of payment, which has further boosted the use of mobile wallets among the masses.
Cash, just a state of mind!
This sudden boom of mobile wallets has also raised a question that ‘Is India moving towards being a cashless economy?’ Commenting on the matter, Upasana Taku, Co-founder & Director, MobiKwik said, “We have begun inching towards a cashless economy already and mobile wallets are supporting positively towards this transition. Recent RBI data confirmed that mobile wallets are growing at a fast pace. For the year 2014-15, 255 million mobile wallet transactions were made.”
There is no denial to the fact that mobile wallets play an elemental role in today’s online shopping scenario. Though Cash on Delivery (CoD) still dominates when it comes to eCommerce payments, but still a lot of consumers are becoming well-versed with this mode of payments. “There are challenges in every new thing you start and the solution is to make a habit change. We have seen if the benefit is large enough, consumers will switch in droves. By making the wallet swifter and safer than cash, we believe consumers will move to a digital wallet, says Sudeep Tandon, Chief Business Officer, Freecharge.
Ensuring a seamless payment experience, timely and hassle-free refund policy, cashbacks and attractive deals are factors that have lured consumers to prefer mobile wallets over CoDs (to some extent). Mobile wallets have surely changed the way Indians transact. Mobile wallet solution providers are emerging almost like banking institutions and have also started getting government’s nod for banking licenses. With such key developments, it’s the eCommerce industry that can take out the maximum out of the booming mWallet industry. “Convenience and speed of transactions have emerged amongst the key priorities for the Indian consumer today. Online shoppers today want their transactions to be seamless and swift. By making payments quicker and hassle-free for buyers, mobile wallets have been helping online retailers in closing their sales more efficiently and driving greater revenues,” said Anish Willams CEO & Co-Founder TranServ.
Gear up eTailers
Not to forget the technological advancements made by the brick-and-mortar retailers to get back into the driving seat. These encroachments clearly hints that consumerism is back in offline retail and thus online retailers will have to fasten their seatbelts in order to retain the lead. The year 2015 saw some prudent eRetail and mobile wallet partnerships which will surely connect the urban consumers with the digital world.
Still mobile wallet industry has just hit the tip of the iceberg as it is currently betting on cashbacks and discounts. “India still remains a cash led country in transactions. There is an overwhelming preference for physical cash, even in urban cities despite the available alternatives. Digital wallets are facing lack of acceptance across many used cases. As we create a simple easy way to integrate technologies to onboard new merchants, there will be a rise in use cases further increasing the salience of digital payments. Converting cash into digital money is another major challenge towards the adoption of digital wallets,” said Tandon.
Many industry pundits are of the opinion that the value proposition of mobile wallet is not about the payment, but the value-add that it offers across a mobile-enabled environment. So, the question that arises is, what they call as a customer acquisition strategy, is it justified or a feasible model in the long run? Only time can give this answer, but when it comes to online retailers it is surely a means to enable their consumers with multichannel payment options.