M-wallet share in mobile payment volume transactions may reach 57% by FY22
Post-demonetisation, the average wallet spend for retail has witnessed a huge jump and is expected to increase from Rs 500-700 prior to Rs 2,000-10,000 in the near term, according to the just concluded joint study by ASSOCHAM and RNCOS.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, according to the study titled 'M-wallet: Scenario post-demonetisation,' jointly conducted by ASSOCHAM and business consulting firm RNCOS.
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 Mr D.S. Rawat along with Mr Shushmul Maheshwari, CEO & founder, RNCOS and Mr Babu Lal Jain, chairman of the ASSOCHAM National Council on Cyber & Network Security.
M-wallet transactions in India 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 driven by growing usage of smartphones, robust mobile internet penetration, growth of e-commerce sector together with increasing disposable incomes.
While in value terms, the m-wallet transactions in India have grown about 20 times to reach Rs 206 billion in FY16 from Rs 10 billion in FY13, highlighted the study.
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, it noted.
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Thus, taking over traditional payment modes, the m-wallet market in India which was estimated at about Rs 1.5 billion in FY16 will grow at over 190 per cent to reach Rs 1,512 billion by FY22.
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, the study noted.
While 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.
Issues & solutions:
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 as it has a significant potential to grow, and expand its user base as we go ahead.
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.
Crystal clear policies and a common regulatory body for all m-wallets (closed, semi-closed and others) are required to bring clarity in procedures and policies between m-wallet companies and the Reserve Bank of India (RBI).
A strong authentication mechanism must be put in place to bind the identity of the user to the authorization of the transaction thereby being extremely mindful of authentication and risk assessment, suggested the ASSOCHAM-RNCOS joint study.
As the mobile payment space evolves, the stakeholders must create secure transactions that foster consumer trust, besides, m-wallet companies must provide a much more secure payment authentication process out to the masses.
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