Mobile Wallets Adoption in India


When was the last time you stood in a queue to pay your mobile or electricity bills? If you are staying in a major metropolitan in India it would be a bit hard to recollect. Mobile wallets like Paytm have transformed the way bill payments, bookings and shopping are carried out. Partnering with various government agencies has paved a path for the mobile wallet companies to strengthen their foothold in the Indian cash intensive economy. India being the second largest smartphone market with roughly 220 million smartphone users has further helped the mobile wallets to come in the mainstream economy. This article talks about the mobile wallets adoption in India, the factors affecting it and the growth hacks used.

Where does it lie in product adoption curve and the profile of adopters?

Users of mobile wallets lie in the early adoption segment. They play with the features and want the payment experience primarily to be smooth. Even if there are some minor defects in the product the users are not dropping out. Reviews and ratings are significantly helping the mobile wallet companies to maintain the sanity of the product and improve the user experience.

Factors and challenges which affected rate of mobile wallet adoption

Even if the number of smartphone users have increased drastically but still the 3G or higher networking infrastructure required has not yet reached the rural parts of India. This has been a main factor for the rural population which accounts for almost 70% of the population of India not shifting to mobile wallet for payments. Mobile wallet companies have been providing discounts and cash backs in a range of 10% to 30% on bookings and transactions which has proved to be a major factor in the mobile wallet adoption rate. Demonetization policy by the government has been beneficial for the mobile wallet companies to acquire the small and medium scale merchants/shops to transact via the mobile wallets. Security concerns of the mobile wallets. There were few security concerns also raised against mobile wallets which also has to some extent affected the adoption rate.

The mobile wallet industry has been having a new entrant every month. This has made the mobile wallet industry more marketing intensive than product intensive. To improve the adoption rate further, more exclusive alliances with already adopted service providers like Paytm with Uber would hugely propel the mobile wallet growth over the other payment options.

Growth and product adoption comparison with other payment methods

Before we dive deep into the metrics of electronic transactions, I would like you to make a note that electronic transactions still constitute a mere 10% of the total transactions. As per the data published by Reserve Bank of India there has been a massive increase in both the adoption and usage of mobile wallet as a mode of payment. Over the past four years, mobile wallet transactions have jumped from ₹10 billion of transactions in 2012–2013 to more than ₹490 billion in the year 2015–2016. In the year 2015–16, debit cards saw more than 117 crore transactions, credit cards added another 78 crore transactions and mobile wallets managed 60 crore transactions but we also need to consider the fact that many users use debit and credit cards for adding money to their mobile wallet.

Growth hacks used

The major market pull in the mobile wallet industry has been promotional offers and discounts. Recently, the early adoption rate grew to a large extent also because of the demonetization policy of the government. Mobile wallet companies also diversified their products by alliances with government agencies for bill payments, railway, flight, movie bookings which improved the user retention on the product. Cashback was another growth hack which the mobile wallet industry used on bookings and payments. They also gave incentives for adding money to the wallet. After targeting the major Tier 1,2,3 cities in India the mobile wallets have implemented money transfer without internet to penetrate the rural market of India.


Mobile wallets have reached the early adoption curve in their product lifecycle. Mobile wallet companies need to improve the UI/UX, crack exclusive alliances with already existing service providers and implement new features which would further enhance the user retention to improve the adoption rate. Strategic alliances and partnerships would definitely help in growing the mobile wallet industry and deep-rooting the cashless economy in India.

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