The mobile-wallet market in India is expected to grow at over 190 per cent to reach Rs 1,512 billion by financial year 2022 from the current level of about Rs.1.5 billion, says a study conducted jointly by trade body Assocham and business consulting firm RNCOS.
The m-wallet transactions are likely to grow at a compounded annual growth rate (CAGR) of over 160 per cent to rise from just over half a billion in FY16 to 260 billion by FY22.
Growing usage of smartphones, robust mobile internet penetration, growth of e-commerce sector together with increasing disposable incomes are the factor which will drive this growth.
“It is anticipated that market value of m-wallet transactions in India will grow at a CAGR of over 200 per cent to reach Rs 275 trillion by FY22 from Rs 206 billion in FY16,” said the study.
The m-wallet transactions, in market value terms, have grown about 20 times to reach Rs 206 billion in FY16 from Rs 10 billion in FY13.
“The mobile wallet market in India has been greatly benefited by demonetisation and its share in the total mobile payment volume transactions is likely to rise from 20 per cent in FY16 to 57 per cent by FY22,” says the report.
The study titled ‘M-wallet: Scenario post-demonetisation’ was released by D.S. Rawat, secretary general, Assocham, Shushmul Maheshwari, CEO and founder, RNCOS and Babu Lal Jain, chairman of Assocham National Council on Cyber Aand Network Security.
It also revealed that post-demonetisation, the average wallet spend for retail has witnessed huge jump, and is expected to increase from Rs 500-700 to Rs 2,000-10,000 in the near term.
“The government has hinted of not remonetising all of the scrapped currency and aims to fill the gap by promoting digital/cashless payment mode, this is bound to further boost prospects for m-wallet sector in India,” said Rawat.
The study also highlighted that post demonetisation, the mobile payment transaction volume in India is likely to grow at a CAGR of over 130 per cent to reach 460 billion by FY22 from just about three billion in FY16.
Mobile payment transactions in value terms are likely to cross Rs 2,200 trillion mark by FY22 from just over Rs 8 trillion in FY16 thereby clocking a CAGR of 150 per cent.
It also highlighted that share of mobile banking segment in mobile payment market is likely to register significant increase from eight per cent in FY14 to 56 per cent in FY17.
The study however said that it is a challenge for the sector to bring copious number of shoppers preferring cash on delivery (COD) and other modes of payment on m-wallet platform.
However, with the ease of payment along with other benefits offered by m-wallets, users preferring COD will switch to the m-payment platform in the coming years.
With a view to win customers’ trust, companies operating in the mobile-wallet sector should take measures like providing effective, completely secure, private and reliable services, 3-D or OTP (one time password) security options, data back-up system and others to spread awareness among people, it added.