Even with over 900 million subscribers, India is yet to see strong demand for electronic account services that allow consumers to transfer money and pay bills using their mobile phones, experts say.
Lack of awareness of these mWallet services and fees imposed by banks on firms offering them continue to curtail the growth of the globally multi-billion dollar segment.
MWallet is considered an effective tool in developing nations since these countries generally have higher number of cellphone users than of traditional computers, they added.
Also, since there is lower rate of banked individuals, mobile phones can be a potent medium for taking banking services to the smaller parts of the country.
Players like MMP Mobi Wallet Payment Systems (MMPL), Oxigen, Paytm and MobiKwik feel that mWallet can play a major role in not just tier II and III cities but also in rural areas. Besides, mWallet applications enable the users not just to pay their utilities and mobile bills, but also buy various services like transport, banking, etc.
Research firm Greyhound said mWallet as a service is an untapped market in India. It gives telecom vendors scores of opportunities to tap into markets where people do not have banks or bank accounts.
It can easily be applicable in sectors like ticketing, communication or even paying at petrol stations.
The Reserve Bank of India has started a pilot project to check feasibility of offline cash-out trial using biometric authentication. The project allows mobile payment providers to test cash withdrawal facilities for a small portion of their semi-closed mobile wallet users.
"Our primary objective is to drive the evolution of the payments landscape in India. MWallets is one such service that can help in reaching out to almost all the corners in India providing affordable and reliable services," MMPL, a Tata Teleservices subsidiary, COO Pradeep K Sampath told PTI.
MMPL's wallet service, mRupee, currently has over 300,000 customers and will increase focus on the migrant population in the country to offer domestic money remittance by expanding retail presence in more than 25 cities, he added.
MWallet services firm Oxigen's Founder Pramod Saxena says that such service not only reaches the areas where penetration of banks have not been as expected, but it also enables people to safely transact their business without going to banks, that in some cases is in the next district or town.
Oxigen launched its wallet in 2008 and is the first virtual mobile wallet in India to be integrated with NPCI (National Payments Corporation of India).
"It is instant, secure and completely reliable and can be used across multiple devices like web, mobile or SMS. Besides, it is also convenient and simple to adopt. It has been quite successful with the migrant workforce who use it frequently to send money to their towns and villages," he added.
