Online shopping, the most talked about segments of retail has undoubtedly shut all its critics betting upon the significant rise of eCommerce industry in the country lately. The millennial consumers and their drift towards online shopping clearly signify that online marketplaces are the ‘new-age bazaar.’
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 is moving in the same direction.
Retailer Media caught up with Anish Willams CEO & Co-Founder TranServ to understand the factors behind this sudden boom of mobile wallets and how it can help eCommerce industry in closing their sales more efficiently and driving greater revenues.
Share with us the factor responsible for this sudden boom of mWallet industry in the country?
While several factors have contributed to the rapid growth of digital payments in India, increased smartphone adoption and better internet penetration have been the main drivers behind the rise of the Indian mobile wallet industry. Moreover, with smartphone users in the country expected to cross 702 million in the future, this exponential growth curve is predicted to continue for a long time to come.
Do you think India is moving towards being a cashless economy?
Yes, India has been demonstrating several signs of decreasing its dependence on cash and paper-based transactions. Mobile wallet users in India already comprehensively outnumber the credit/debit card users, and – given the rapid adoption of mobile wallets and the benefits that they bring in – their numbers are soon predicted to surpass the number of bank account holders. Digital transactions have also been gaining an edge over paper-based transactions in recent times. The 2014-15 fiscal saw $1.43 trillion processed digitally, as opposed to $1.33 trillion processed through paper-based transactions. With the digital medium rapidly gaining acceptance throughout the country, we can soon expect most of the country’s transactions to be of a digital nature.
Another factor that underlines this migration towards a cashless future is the consumer transactional behaviour. With almost every aspect of our daily lives from buying items online to making utility payments rapidly moving online, digital transactions have been growing in presence across the country.
How do you analyse the trend in tier II and III cities of the country?
While digital payments are witnessing exponential growth in the metropolitan cities, even tier-II and tier-III cities are definitely catching up in terms of transactional volume and market growth for digital payments. Several mobile wallet players are now offering remittance services in order to facilitate better adoption. These remittance services, by allowing physical cash to be loaded into the wallet through an affiliate outlet or by money transferred by family & friends, are reaching out to the hitherto untapped tier-II and tier-III markets.
How mWallet has helped online retailers to take the lead in this retail war?
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. Moreover, mobile wallets are more secure than other digital payments tools such as credit/debit cards. Not only do they have security measures such as PCI-DSS certification and two-factor authentication in place, but also allow users to transact without exposing their confidential financial details which could directly be linked to their bank accounts. This enhanced security has driven the adoption of wallets in India, and has allowed online retailers to further entrench their leadership within the Indian retail segment.
What are the major roadblocks of the industry and how to you plan to overcome them?
One of the major roadblocks that the digital payments industry currently faces, especially in India, is the lack of a widespread adoption of the digital medium as well as the continued affection to cash. Despite witnessing impressive smartphone adoption, less than 30 percent of the country’s population currently has access to digital devices. Moreover, despite the entry of 4G-LTE services within the country, there is still a significant portion of the country’s population which does not have access to high-speed internet facilities. The dependence on cashbacks and discounts to drive adoption by most of the digital wallet service providers in the country is another obstacle that is holding back the Indian digital payments ecosystem in achieving its full potential.
Where do you see the future of mWallet and eCommerce industry together 3-5 years down the line?
As mentioned above, we are looking to build an end-to-end payments infrastructure within the country which caters to several aspects of the overall online and offline transactional experience such as online payments, merchant payments, mobile-based push payments for consumers and merchants, device-based frictionless checkouts for online purchases, and P2P payments. The aim is to popularise digital payments in India by creating a well-integrated nexus of virtual and physical prepaid solutions. On the whole, with the mobile wallet industry expected to touch $6.6 billion in net worth by 2020, we see a great concomitant growth for both the mobile wallet and the e-commerce industry over the next four years.