Today a smartphone is everything. It's a phone (primarily), a music player, personal organiser, social media manager, camera, video and what not, but is it safe enough to become your wallet as well? Digital payment industry in India is splurging at an unprecedented pace and is predicted to grow even bigger in the years to come. It is expected that by 2019, 59 per cent of all eCommerce transactions will be made using these eWallets.
Looking at the rising potential of the industry, digital payment service providers are competing fiercely by offering attractive offers and unrealistic discounts to lure customers. Despite the rise in acceptance of eWallets, future runway of the industry is touted to be challenging. Indian mobile payments giants like Paytm, Freecharge and MobiKwik are trying their best in order to prevent fraudulent mobile transactions. Nearly 100 customers of e-wallet FreeCharge lost 8,000- 10,000 across the country in cities like Chennai, Mumbai, Hyderabad, Delhi only to be restored later as the e-wallet's system met with a phishing attack. Users of e-wallets say that these companies provide no redressal mechanism, especially when they need to be contacted on an urgent basis.
Transactional fraud is one big barrier that is impeding these service providers to win consumer’s trust. Mobile transactions are increasing rapidly, but retaining customers is getting tougher. Putting money in eWallets is like trusting it as a bank and this is where these companies are falling short.
Commenting on the same, CEO- South East Asia of Worldline, a payments and transactional services company said “Today’s banking customers are spoilt for choice. So, banks are not basking in the security of satisfied customers anymore. A satisfied customer and a loyal customer are not the two sides of the same coin. Especially with the introduction of UPI, there will be too many banks chasing the same set of consumers. This is where loyalty programmes can help shape the relationship between lenders and customers.”
Bifurcating one of the biggest threat to their business that is fraud, these companies are leaving no stones unturned to check on the fraud. Unlike earlier, companies have become more prompt on checking such threats. Paytm itself blocked about 5.5 million users in 2015 after they were hit by fraud. The company even barred about 17,000 of its 1 lakh merchants over the past eight months. Though currently fraudulent transactions through eWallets account for about 1 per cent of the market, but are likely to rise by almost double in a couple of year.
As per 6Wresearch mobile wallet transactions will surpass $11 billion mark by 2022. According to Counterpoint Technology Market Research, the segment was worth $3.2 billion in 2015, with an average transaction value of close to $2. With such whooping numbers and huge consumer base, it is very important for current eWallet flag-bearers to find out gratification in the ecosystem in order to make eWallets a seamless and a secure mainstream mode of payments.