Mobile wallet is gradually displacing cash in India, says GlobalData

NEW DELHI - The mobile wallet market in India is poised for significant growth as Indian consumers are increasingly turning away from cash and card, says data and analytics company GlobalData.

According to GlobalData’s 2017 Consumer Payments Insight Survey, India is one of the top markets globally in terms of mobile wallet adoption, with 55.4% of survey respondents indicating that they have a mobile wallet and use it. India is followed by China and Denmark.

The adoption level in India is much higher compared to many of the developed markets such as the US and the UK, where consumers predominantly use cards, the report says.

Mobile wallet transactions grew manifold in the last five years, rising from INR24bn in 2013 to INR955bn in 2017, and will surpass the INR1tn mark in early 2018.

Ravi Sharma, senior analyst at GlobalData’s Payments practice, comments: “The growth in mobile wallet market is fuelled by the Government’s policies to promote electronic payments, coupled with a rise in smartphone penetration, and improved telecom and payment infrastructure.”

The Government’s demonetisation move in November 2016 was a game-changer as it had led to a massive cash-crunch in the country. Most of the ATMs dried up, compelling people to switch to an electronic-mode of payments.

While medium to large-value transactions continue to be made through digital banking channels, the low-value day-to-day transactions are carried out through mobile wallets.

The total value of mobile wallet transactions grew two-and-half times between 2016 and 2017.

Initially considered as e-commerce payment tool, post demonetisation, these wallets are now widely used for day-to-day transactions at supermarkets, grocery stores, street vendors, tea stalls, fuel stations, and even inside taxis and auto-rickshaws.  www.globaldata.com (ATI).