Mobile seeing a 1,500 percent increase in

Mobile
wallets also sometimes called electronic/e-wallets, virtual wallets, digital
wallets and similar terms are mobile applications that
enable financial transactions. They help customers like us to
send payments for things we want to buy with just a few taps on the phone.

It is the era of
digitalization and globalization and it is not surprising that money will also
follow the suit. There was a time when the need of plastic money arose and it
replaced the liquid cash in the pockets. Recent trends reflect that digital
money kept in mobile wallets are replacing the credit cards and debit cards. Expanding smartphone user base and rising mobile internet penetration
to propel growth in India mobile wallet market.  

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In the current
demonetization scenario, the need of digital money arose like ever before. Demonetization
has sparked a new digital economy in India. It has led to an increased use of
Digital Wallets. According to financial analysts, by 2018 the mobile wallet
market in India will grow at a CAGR of 140%. The vision of connecting Indians
through digital media has been further encouraged by this move on the part of
the government. Some mobile wallet providers are giving facilities to unbanked
consumers to deposit money into their wallet through agents, but that is
geographically very limited.

The m-wallet (mobile wallet) segment broadly
consists of services related to banking transactions, transfer of money as well
as value-added services like bill payments, shopping, ticketing, etc. Of these
services, m-wallets are primarily used for the transferring money, followed by
the payment of bills. These digital wallets not
only help in paying electricity, DTH, and transport bills, but they also enable
payments at nearby mom-and-pop stores that are already registered for these
services. Some of the major m-wallet players are Airtel Money, mRupee, Vodafone
m-Pesa, Oxigen Wallet, Paytm, Mobikwik and Idea Money (VMSI). With
demonetization in effect, several digital payment solution providers have
created innovative ways to attract new customers. The result has been mobile
wallets like Paytm witnessing
200 percent increase in app download numbers, and Ola Money seeing a
1,500 percent increase in wallet recharges.

There is just too
much money going into the mobile payments industry. The industry of mobile
wallet has too much to promise on the outside, which has caused many public
companies’ valuations to be inflated. Some companies are also actively
investing in mobile payment startups that could have strategic value for them.
Investors are also pumping huge amounts of money into startups that aren’t even
close to profitable. Putting money into something is easy but the tricky part
is getting it out. Is this the making of another bubble?