Mobile money is the new vista for payments, which has taken the world by storm. Today, it is estimated that the global mobile wallet market will touch a whopping $5 trillion by the year 2020, growing at a phenomenal CAGR of over 127% between 2013 – 2020. India, which has the fastest growing mobile subscriber base in the world- with over 900 million mobile phone users, 100 million smartphone users and 230 million mobile internet users – is showing an affinity for mobile money transfers.
With the RBI mandating banks to push their m-banking services and with the entry of multiple mobile payment players, India seems to be getting ready to move money on mobile. What is interesting to note is the fact that according to RBI, the total number of credit card holders in India as of October 2014, is 19.9 million; juxtapose that number with the 20 million active users that Paytm, the leader in the mobile wallet space in India, claims to have and it becomes clear that the uptake for mobile money transfer is on the rise.
Mobile wallets as a concept has been around in India for the last 5 years. In the early days, mobile money transfer in India was a complex affair, involving sending complicated SMS messages for making payments and a heavy dependency on telecom networks to see those payments through; reasons why there was a low acceptance of the service. However, today, with the increase in smartphone penetration, availability of app and wallet based payment solutions, the above mentioned issues have been addressed a great deal .
As per a recent report by GrowthPraxis, the market for mobile enabled payments in India has grown more than 15 times since FY’12. There are several reasons why. One, is the entry of low cost smartphone mobile companies, which are placing these gadgets well within the reach of an average Indian. Today, 25 million Mobile Internet users in India come from rural India. Secondly, people are spending more and more time with their mobile phone – an average of 3 hours or more. As per industry reports more than 90% of the mobile internet users are using it to research products before buying it. So it’s very likely that these users will go a step further and buy a product/service on their mobile phones, thereby boosting mobile payments.
If these indications are anything to go by, then mobile wallets seem to be the direction that the future of payments is going in. It can prove to be a cost efficient, time saving and hassle free means of money transfer in India.