With Indian consumer slowly but steadily moving towards mobile payments, the industry is likely to reach $6.6 billion market by the year 2020. With better security, attractive deals and discounts and ever-increasing smartphone penetration across the country, mobile wallets have created a parallel ecosystem in the online payments space. From investor’s interest to consumer demand, the mobile wallet trend is surely moving towards making India a cashless economy.
As per a research, mobile payments in India are estimated to grow from $86 million in 2011 to $1.15 billion in 2016, with a compounded annual growth rate (CAGR) of 68 per cent.
Retailer Media caught up with Upasana Taku, Co-founder & Director, MobiKwik to understand the future of mobile wallets in India and how will it compliment the eCommerce industry in making larger revenues and a much larger consumer-base.
Share with us the factor responsible for this sudden boom of mWallet industry in the country?
We launched India’s first mobile wallet with a vision to make people’s lives easier. In the beginning, they could do phone recharges and pay bills and gradually it became about a cashless life. Today, our users can live their entire day without cash and pay for every utility through their wallet, be it paying for groceries at Big Bazaar or shopping clothes at Central Mall/Madura garments or enjoying a meal at Dominos. This ease of payment has made people discover a new way of life which is truly digital. Mobile wallets are popular as people have adapted to paying digitally and not having to carry their wallet everywhere or look for ATMs. Growth of smartphones and easier data access has also contributed greatly to this growth.
Additionally, retailers, both offline & online have supported digital payments as a preferred mode of payment, which has further encouraged use of wallets.
Do you think India is moving towards being a cashless economy?
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.
This is relevant in the context as India has over 1 billion mobile connections and the adoption of smartphones is increasing rapidly. Mobile wallets have transformed a phone into a ‘Catalyst of Change’, that provides financial services to unbanked Indians.
RBI’s new vision document is promising and recent steps taken by the government and RBI, including UPI will further boost digital payments.At the same time, fintech companies have to contribute to this vision with innovation. MobiKwik launched cash pick up and cash deposit for wallet loading to encourage cash users to start paying digitally.
Therefore, we already have a reach to the interiors of India, where banks may not bepresent. There are over 200 million unbanked Indians who do not have access tobanking services, there are many more that do not have confidence in using net banking or cards for transactions, therefore a wallet is the most viable solution to this problem.
How do you analyze the trend in tier II and III cities of the country?
In Tier 2 and Tier 3 cities, the uptick in mobile wallet usage has been the highest. In fact recently we launched our cash pick up services in Surat and Jaipur and the response has been tremendous. The trend in these cities will only be an upward trajectory in days to come. As spending patterns change and the growth in disposable income continues to go up so will the mobile wallet usage.
At MobiKwik, we have undertaken strategic initiatives to promote the use of digital payments across the country. Our exclusive cash pick up service allows users to request cash pick up for wallet loading and a MobiKwik representative reaches their location within 30 minutes for it. Also, our users can walk into more than 1, 00,000 touch-points across 1000 (ICICI branches, Suvidha outlets etc.) cities in India to deposit cash in their MobiKwik wallet. One can locate these outlets with the nearby feature in MobiKwik app. The feature also shows outlets around the user where MobiKwik is accepted for payments. We have created a merchant network that caters to the user’s every day needs such as Big Bazaar for grocery shopping, Central mall and Madura garments for clothing, Dominos for eating out etc. MobiKwik can also be used for bus bookings.
MobiKwik is determined to make mobile wallet accessible across the length & breadth of our country and also provides additional financial services to its users like micro credit. Our vision is to have users pay, invest, borrow and save all using MobiKwik.
How mWallet has helped online retailers to take the lead in this retail war?
Mobile wallets are undoubtedly a very important part of retail transactions. Online payments reduce the cost of doing business compared to Cash of delivery which is more resource intensive and expensive.
Also mobile wallets such as MobiKwik assist retailers in integrating robust payment mechanisms without having to undertake the hassle themselves. This ensures that online retailers continue to offer the great shopping experience which results in better customer retention and ultimately more monetization opportunities.
What are the major roadblocks of the industry and how to you plan to overcome them?
As mentioned earlier, usage of cash is our biggest challenge and we have launched cash loading for MobiKwik (through cash pick up and deposit) to address this challenge.
Secondly, adoption of mobile data and network access is still a challenge and we will soon be launching app advancements to make it easier for our users to use MobiKwik even with older phones and low data connectivity.
Where do you see the future of mWallet and e-Commerce industry together 3-5 years down the line?
Ecommerce and mobile wallets are growing hand to hand. 80 per cent of our GMV comes from online businesses and we have partnerships with some of the leading ecommerce players in India including Big Basket and Myntra. We have also launched bus booking on MobiKwik platform owing to increased demand from our users. Having said this, we know for a fact that e-commerce payments with mobile wallets have a huge scope for growth and we are determined to be at the forefront of it and drive users’ adoption of mobile wallets and encourage increased usage.
So far, the most preferred payment option for e-commerce players is COD that is cost & time intensive for online companies and also is a hassle for users to find exact change for payment. In the next 3-5 years, my belief is that we will witness a huge change in this trend and contribution of mobile wallets will increase over a hundred percent.