Mobile Wallets adoption in India

“Whenever I go for public meetings, I ask people how many of you are on Facebook. There is hardly any region where less than 80 per cent of raised hands in response. According to me, Indians first observe technology, then adopt technology, then enjoy it and in the process they become empowered,”
- Ravi Shankar Prasad, Union Minister, Law and Justice and Ministry of IT (source : http://cashlessindia.gov.in/)

November 8, 2016 was a life changing day for about 1/6th of the world’s population — India. Most of you might already know that I am talking about ‘Demonetization’.

Source : https://www.linkedin.com/pulse/m-wallets-reality-india-zoher-ghadially

But there had to be something more to this, amidst all this confusion and chaos, Mobile Wallets rose to the occasion. Before we begin, let us quickly understand what are these wallets. These are a digital locker where a user can keep money and spend it just as he would do it from a physical wallet. But here is a catch, the merchant should accept the wallet. The mobile wallet (aka M-Wallets), unlike an e-wallet, is specific to the smartphones.

M-Wallets basically fall into three categories :

  1. Closed Wallets : Not widely accepted; can be used only in a few establishments and their partners. example : Ola money
  2. Open Wallets : Open wallets are the ones that allow you to buy goods and services, withdraw cash at ATMs or banks and transfer funds. They can only be by a bank, either jointly or independently. example : M-Pesa
  3. Semi-Open Wallets : Paytm is a semi-open wallet. It gives you more options than closed wallets, ability to transfer back to the bank account, spend at merchant stores but no cash withdrawal.
Types of M-Wallets and services

Now we know M-Wallets are useful, but are they being used enough to be useful ? I set out to find and analyze what exactly is the state of digital payments in India and expect to arrive at the percentage of those transactions being made through M-Wallets.

Data Source : United States Census Bureau & World Bank

Yes, we have a good G.K and we know the population of these countries, but that is not what this graph is here to tell us. It is to be observed that even if 0.86% of Indians boycott ‘cars’ , its like the entire Belgium opting for that change. A small % in the Indian population graph projects a mass change in numbers.

Data Source : worldatlas.com and medianama.com

Here it looks like the entire developed world has become cashless, or being cashless has helped them develop ? In another observation, fifty percent of the Indian population has a debit card, aren’t these 650 Million people ? While these numbers look staggering, there is another fact that would make us think differently.

Utilization

Many economic and financial experts believe that India is far from being a cashless economy, and they have reasons to say so. According to RBI data, in the first four days of December, the volume of transactions done daily through eight leading mobile wallets and prepaid payment instruments (PPI) was about 25 lakh, worth about Rs 60 crore.

Data Source : Forbes, Google report & Boston Consulting Group

Is it a mere coincidence that the dip resembles the map of India or does it give us a sign ? In 2016, 78% of all consumer payments in India were made in cash. Viewed in comparison to the 3.5% to 8% for developed countries such as the U.S. However as per the Boston Consulting group, the cashless payments in India are projected to increase to 59% by 2025 and the Indian population is projected to make digital payments worth $500 billion in the next four years, resulting in non-cash overtaking cash transactions by 2023. I will keep this article specific to the M-Wallets hereafter. Let us try to understand the users of M-Wallets.

M-Wallets User Profile

Mobile wallet adoption in India has risen significantly in the last couple of years as smartphones and mobile internet have become an inseparable part of our daily lives. With the launch of superior smartphones and 4G internet, transacting through a mobile wallet is going to get even easier.

Let us begin this journey with the famous Product Adoption Life Cycle curve (aka Bell Curve), and on the way I will explain each user profile and where do they stand in terms of adopting to M-Wallets.

Source : realcomm.com

Innovators are those M-Wallet users who can be safely assumed to be using the digital payment platform since it’s inception. They are the tech savvy younger generation and mostly fall under the 18–30 Age group.They form only 2.5% of the market but influence a larger section of buyer segment to use the product. Ideally, they spend almost all their money through digital payments, for example : Ola Money for Cabs, Paytm for Grocery, Net Banking for fund transfer, Debit card for Amazon orders, Credit card for iPhone emi and the list goes on. The ideal innovator can live their life without cash, such is his passion for technology and digitization. They are ready to grab on to any future M-Wallet product too.

Early Adopters are probably the most important users for M-Wallet in India because they can become the product evangelists. These are people who are highly influenced with the innovators and seek motivation to use the product. In the Indian M-Wallet scenario, most early adopters lie in the 18–35 Age group and live in metro and some tier-1 cities. They are working professionals, students, businessmen and technology friendly folks who are aware of the benefits of digitization. They adopted to use the M-wallets once companies like Paytm, Freecharge and Mobikwik began to be popular in media, news, advertisements and peer users. The early adopters generally comprise 13.5% of the total users.

Early Majority is a set of users who usually take some inspiration from the early adopters and are somewhat late (but still in time before the product becomes outdated) to adopt a product. Now here comes a good and a bad news for M-Wallets in India. The good news is, early majority is about 34% of the total users. The bad one is, M-Wallets have not really been able to get much hold of this segment. These users check various technical forums, talk to the earlier two categories, seek a lot of feedback and do a lot of research before adopting a product. When a product sales hit a wall between early adopters and early majority, this situation is called chasm as you can see in on the curve. For a product to become successful, it’s crucial to jump out of the chasm and get a hold of the early majority. M-Wallets though have users from this category but the numbers are not enough to make the jump yet. Although the Demonetization push by the Government of India might give the necessary push needed for M-Wallets to jump out of the chasm.

Late Majority is a set of users who are skeptical about the usefulness, quality, value and ROI of the product. It won’t be completely wrong to say that they are skeptical of everything about the product. But they eventually adopt the product at a later stage, once they have proven feedback of product success. Usually by this time the innovators and early adopters have moved to the newer versions. From the graphical data presented in the article, it is obvious that the majority still wants to hold the cash. With a mere 22% of transactions being cashless (which include plastic cards and other digital modes also) Late majority is definitely not the place where M-Wallets exist today and they comprise 34% of the users.

Laggards have a habit of building a wall between them and technology. They are extremely averse to change. They are typically older than the other users too and take a lot of time to analyze if they even need the product. They are the kind of users who might visit a mobile recharge shop and buy a paper voucher (if it was still available). They are also extremely cautious about spending a penny extra, specially on technology products. They wait for deals like “50% + 75 % OFF” or “Clearance Sale”. They are definitely not the user base for M-Wallets in India today and comprise 16% of the users (Fortunately).

Where do M-Wallets lie on the curve ?

Post demonetization, the M-Wallets have shown explosive growth since the users were left with no other option after 86% of the cash in circulation was sucked out.

“Over 93% of people in rural India have not done any digital transactions. So the real potential lies there.”
— Praveen Dhabhai, COO, Payworld

Let’s get in to a small analysis and begin with completely ignoring rural India, which is still struggling to find shops which accept a debit card and banks that offer one, as a user base for M-Wallets. Hence it w For the sake of simplicity let us talk about Urban India which is still a good 400 Million of the population.

Source : blog.paytm.com

Paytm, the market leader among the M-Wallet providers in India claims to have 147 Million Wallet users and 80 Million of them to be active in December, 2016 alone. While in an Economic Times report Mobikwik, the second largest M-Wallet provider claimed to have a network of 45 Million users.

As per indiantelevision.com, Freecharge, a Bangalore-based company, has been witnessing a steady growth of 15% in their monthly transactions with over 50 million users. The top three companies mentioned hold majority of the market share and can be considered good enough for the evaluation. Even if half of the number of active users which these companies say is true, it still means that there exist about 60–80 Million active users of M-Wallets in India. However the transaction amount and utilization still remains a question. Even then, 80 Million out of the total Urban population of 400 Million is about 20% of the users. After the sudden growth seen by these companies post Demonetization, it is visible that M-Wallets have taken a jump from the chasm towards the early majority. However these results are expected to normalize once new currency notes are back in the economy. Hence I will place the M-Wallets somewhere between early adopters and early majority on the Product Adoption Life Cycle Curve.

“Mobile wallet is a recent phenomenon. Its adoption will take time as it is a habit change experience for users as they are migrating from cash to wallet experience,”
— Jitendra Gupta, MD and Founder of Citrus Pay

Factors and Challenges which affected the rate of M-Wallet adoption

Factors to growth :

  1. Smartphone and mobile internet revolution :
Source: dazeinfo.com

The mobile internet and smartphones have been witnessing a revolution in today’s India. This has spurred the M-Wallet growth along. The leading players are the likes of Paytm, Mobikwik and Freecharge. They have capitalized on the explosive growth of smartphones and internet in general.

As per the report released by released by the Internet and Mobile Association of India (IAMAI), ‘For the first time ‘online communication’ has surpassed ‘social media websites’ to top the purpose to access mobile internet list. 80% of the urban users use mobile internet for communication whereas 74% access social networking sites using their mobile internet’

2. Convenience :

This has emerged as the most important growth factor since the beginning of digital payment era. Some digital wallet firms such as PayTm, Mobikwik and Freecharge are now encouraging their customers to transact using their mobile devices at select local grocery stores, restaurants and petrol filling stations in the offline world. These offline points of sale will contribute to 60% of digital payments eventually (source : Study by Boston Consulting Group and Alphabet Inc.)

Specially the modern tech savvy consumers just can’t stop appreciating, being able to pay all household bills, recharge mobile currency, pay for an online order, buy gold, recharge metro card and much more while getting discounts and cashback all the way through. Adoption of M-Wallet may be a debate, but on the convenience front, the idea has been an undisputed champion.

3. Support from Government & RBI :

The Central Government under the leadership of the Honorable Prime Minister has left no stones unturned in promoting cashless transactions. From Fuel to Rail Tickets to Insurance to Highway Tolls, all of these have been given incentives if the transaction is made digitally. No service tax will be charged on digital transaction charges/MDR for transactions up to Rs.2000. These measures have infused confidence among the consumers to shift to digital payments. M-Wallet companies have benefited vastly from these shift in policies, so much so, that Paytm had put a front page advertisement thanking the Prime Minister for such measures.

The RBI has approved ‘payments bank’ license for many M-Wallets including Paytm. The bank will sell products such as loans, wealth management and insurance to drive revenues. Payments banks are not allowed to lend themselves, but many are banking on cross-selling banking products through partnerships. RBI has also enhanced the usage limit to Rs 20,000 for accounts without KYC and Rs 1,00,000 for accounts with KYC. Most M-wallets are now also supporting the newly launched Unified Payment Interface (UPI).

4. Demonetization

Post demonetization, e-wallet companies like Paytm, MobiKwik and Freecharge have seen a hike in their daily transactions like never before. Many of these companies have already announced increase in hiring.

“We have observed unprecedented growth. Our user base has grown to 40 million and we have added 1,50,000 merchants, which makes us directly available at 2,50,000 retailers now,”
— Mrinal Sinha, chief operating officer at MobiKwik
Source : Google trends

I observed the search patterns of Indian users on ‘Google Trends’ after November 8, 2016 and you can see the results for yourself here. There has been a spurge in the M-Wallets awareness, usage and hence business. Mobile payment services have received a massive boost over the past three weeks. The expected number of users adopting e-wallets is only going to increase from here on.

5. Corporate Tie-Ups :

Indian urban population has become fairly accustomed and used to the idea of paying Uber taxi fare by Paytm. This was one of the major initial tie-up which forced Ola Cabs to come up with their own wallet which is called ‘Ola Money.’ Another famous M-Wallet, Mobikwik has cracked a deal with IRCTC for ‘tatkal’ payments and Amul outlets as well. Food and Grocery delivery Apps like Swiggy, Grogers and Faasos have also tied up with wallets like Freecharge, Paytm etc. Such happenings are becoming more and more common nowadays and has boosted the M-Wallet industry with the idea of mutual growth.

In another development, users can now pay for fuel with ‘Ola Money’ on Verifone enabled point of sale devices in any of these fuel stations with a one-step mobile verification process.

Challenges and roadblocks :

1.The Inertia of Cash

The typical Indian consumer has this habit of paying by cash. The touch and feel of the note is a difficult thing to let go. Cash keeps the economy going ahead even where there is a power cut or Bank Holiday. This is a major challenge to the M-Wallet industry since the poor need to be educated to open bank accounts and move to digital payments from the habit of using cash all the time. This is even more difficult since a large chunk of the population has never used anything other than cash ever at all.

2.Difficult to use

Digitization is more than just a reform in India, it is as much a ‘Cultural Revolution’ as it is a ‘behavioral modification’. For a villager or farmer living in a rural region, paying a Rupee by cash is far more satisfying than paying the same by Paytm. As per the TRAI report in July, 2016 the Urban tele-density is 148% but the same for Rural is 50.72%. Available of reliable internet connectivity is a big question in Rural India. The entire idea of paying for something through mobile where the cash is not to be seen anywhere has just not clicked in the villages and this remains to be a major roadblock for M-Wallets too.

3.Fraudulent cases

Urban cities are witnessing many fraud cases concerning M-Wallets nowadays. if hackers have stolen credit card information, they transfer the money to a wallet at one go and later use it for multiple transactions. This saves them from procuring a one-time password (OTP) for each transaction.

“Indian money is not safe anymore with chances of more frauds and hacking happening. Stopping these cybercrimes would be a tedious task for mobile operators. And what happened in case of mobile phone is lost”
— Suniil Pachisia, VP, Pratibhuti Viniyog Securities Ltd

There also exist challenges like security threat of ownership of foreign companies. For example : Alibaba’s stake in Paytm.

“We have that slight risk of data exported to China about consumer spending and behaviour by Paytm, if China exerts pressure or threatens to pull out.”
— Advocate Prashant Mali, Cyber Law & Security Expert

4.Coverage and Reach

This is one area which can be seen both as a major challenge and opportunity for M-Wallet companies. As mentioned earlier, 93% of Rural India has never done a digital transaction ever. On one hand this has been a major challenge in front of the FinTech companies, however the same has been an opportunity and motivation for them to strive harder towards achieving greater market.

5.Non-Interoperability & Extra charges

As of today, M-Wallets are not inter-operable. For example : you can’t transfer money from Paytm wallet to Mobikwik wallet. This has been criticized at many forums, specially after the launch of UPI. Many M-Wallets are now also payments Bank, however they levy some charges which might be a roadblock for user retention. For example : charges to transfer money from Wallet to Bank account.

6.Cost of Retention

Almost all the M-Wallet companies are well funded and hence offer tremendous discounts and cashbacks. However the sustainability in the long run and justification of spending so much on user retention can be seen as a challenge.

Growth and product adoption comparison with other major payment methods

Digital Payment Methods (Source : http://cashlessindia.gov.in/)
“Users can be classified into four categories. First category is of people who have credit/debit cards and are at ease using that mode of payment. Second category people who have cards but still prefer using COD. Third category is people who do not have cards, so they have to use COD. And the fourth category is of people who want to use COD but merchants do not deliver products to their pin codes. Mobile wallets addresses issues of all four categories of people. It caters to users convenience over using cards. Availability of a person to make COD is mandatory, however with the wallet this problem also gets solved. It a tough pull for the industry to get all COD users to mobile wallet but ultimately it holds an immense scope.”
— Udit Sharma, Vice President, Oxigen

M-Wallets provide a convenient solution to the cash crunch issue, but they are just one of the many digital payment options available. I will try to present how do M-Wallets compare to other options available to the user.

Banking Cards (DEBIT / CREDIT / CASH / TRAVEL / OTHERS) :

These cards are issued by the Banks along with the Bank Account. The wide variety of cards available including credit, debit and prepaid offers enormous flexibility to the consumer. They provide two authentication techniques for secure payments viz. secure PIN and One Time Password (OTP). RuPay, Visa, MasterCard are some of the example of card payment systems. Payment cards give people the ability to purchase items in stores, on the Internet, Point Of Sale (PoS) and withdraw cash from the ATMs.

In terms of adoption, there were ~29 Million Working Credit Cards and ~570 Million Working Debit Cards in India(Source : RBI). However the same can’t be said about usage. Also it is not clearly known that how many of these have unique owners. With more than 40% of Indians still out of the Banking System, Plastic cards may be ahead at the moment, but M-Wallets with the convenience, cashback and demonetization push, are catching up fast.

Unstructured Supplementary Service Data (USSD) :

This innovative service runs on the USSD channel, and is also known as the ‘*99#’ service. To avail this facility, customers are required to dial *99# from their registered and Bank a/c linked numbers. This dialing number is the same across all Telecom Operators. It is speculated that there are more than 100 crores mobile users in India and the fact that the ‘*99#’ service is available in 11 Indian Languages, it gives this service a great reach, especially to the rural areas where people have limited internet access.

Source : NPCI

The USP of USSD is it needs no internet. However, the limit of Rs. 5,000 on transactions and a number of steps involved in the process make it difficult for the users to adopt quickly. As per the telecom regulator TRAI, 70% of phones in India are feature phones and there are efforts to make USSD easy to use as M-Wallets and UPI. However, the fact that USSD transactions can’t be cancelled along with other limitations would put M-Wallets ahead of USSD at least at this point in time.

Aadhaar Enabled Payment System (AEPS) :

AEPS is a bank led and triggered payment facility. In simpler words it is an APP which will soon be available on Google Play and App Store. It is a Government Of India initiative to allow payments through aadhar card at PoS and Micro ATMs. As per the Union Minister Ravi Shankar Prasad, AEPS has also created employment opportunity for the Bank correspondents aka Bank Mitra who will be hired by the Banks to facilitate AEPS and make it reach the masses.

The fact that all you need to make a payment is your Aadhaar number and sufficient money in your bank account and even a smart phone or mobile phone is not needed, makes it sound like a facility that could reach the masses. However just like any new service, AEPS is in a early stage and adoption will take time. At present M-Wallets seem far ahead in terms of product adoption.

“We will create awareness about this mode of transactions. We will eventually create capacity for 40 crore authentications. Yesterday, 1.31 crore Aadhaar-enabled biometric authentications were reported. We will increase it gradually.” — Ajay Bhushan Pandey, UIDAI Chief Executive Offier

Unified Payments Interface (UPI) :

UPI is the latest entrant in this hot discussion of digital payments. We have seen some Apps which let you book all kinds of cabs and even compare their fares. UPI is a similar idea, which gives you the power of having multiple bank accounts in one App. It has brought banking services, fund transfer and payments all under one roof. Many experts see this as a big threat to the M-Wallets industry. UPIs have only incorporated bank accounts. However Paytm has added UPI payment to its App allowing customer to add money to Paytm wallet through UPI ID. UPI provides the convenience of e-wallets with additional security as it works on a single click 2 factor authentication. In order to ensure privacy of customer’s data.

Currently, in order to enjoy the benefits of mobile banking using bank apps, users are required to know IFSC code, bank account number and a lot of other details. This creates a lot of friction in using the app. Also, since people are wary about sharing personal banking details, bank apps have never been so popular. UPI will bypass all this by making transactions easy without the need for personal details. (data source : Indian Express)

“E-wallets and UPI are at par when it comes to enabling one click transactions,’’ — Sunil Kulkarni Deputy MD, Oxigen.
“UPI is the next generation of payment solutions. Wallets are redundant technology,’’
— Ashutosh Kumar, Regional Head and MD, Standard Chartered

These are two very contrasting statements by two MDs. As per my analysis, UPIs are really an advanced and useful proposition and are expected to gain users at a fast rate. It has advantages over M-Wallets like the money is held in the Bank account and earns interest. Also the wallets are not inter-operable. I expect UPI to get ahead of the M-Wallets in near future, unless there is a tie-up between them or the Wallets come up with something that revolutionizes the entire market. However, it is difficult to gain market against the established and VC funded M-Wallet players due to their user reach and retention policies like cashback and huge discounts.

Besides, this is all set to change in case of some e-wallets. “Interoperability will be a non-issue, as Oxigen Wallet application also creates Virtual Visa Card which is accepted on any eCommerce site or mCommerce applications. In physical retail, it is launching by early January 2017 universal QR code solution that will accept Oxigen Wallet, Visa/MasterCard/RuPay QR code as a single QR code solution”. (Source : dnaindia)

Point of Sale :

Point of sale or PoS as is is better knows as, is the place where actual sale is made. On a macro level, a PoS may be a mall, a market or a city. On a micro level, retailers consider a PoS to be the area where a customer completes a transaction, such as a checkout counter. It is also known as a point of purchase. PoS can be Physical, Mobile or Virtual. (Source : cashlessindia.gov.in)

“We are not accepting PayTm at our store anymore, With PoS, the money goes directly to our bank account. We can pay our vendors through our bank account using online payments or through cheques” (source : newindianexpress)
— Mohammad Yakoob, owner of Green Mini mart supermarket

The RBI had increased the limit for Paytm to Merchant’s Bank a/c from Rs 25,000 to Rs 50,000. Although it seems as a few Merchants a favoring PoS over the M-Wallets, the consumers seem to have a liking for the Wallets due to the convenience factor and in a country with 1.3 Billion people, it’s the consumer who should dictates terms with an ever increasing demand.

Internet Banking :

This has been a widely used service in the urban areas. Internet banking allows a user to login to his account from a desktop computer or mobile App. Modern day banks provide a long list of features through internet banking. However, this service required a stable internet connection and users experience transaction failures on weak networks like 2G.

According to a survey by McKinsey & Company, only 7% of the Bank account holders in India use internet banking. The most common pain point for the users is remembering the login details and actually having to type in every time they log in. Compared to this M-Wallets have a much easier log in and payment facility. Adoption of M-Wallets have been better received by the consumers than internet banking.

Micro ATMs :

These are low cost devices which will be connected to the Banks across the country. This will be present with ‘Banking Correspondents(BC)’ who will enable the users to conduct instant money transactions. The BC could be a small shop owner and will act as a Micro ATM for the vicinity. The workflow is a customer going a nearby BC, giving his unique identity proof as authentication and get cash from the BC. These correspondents will act as a virtual Bank for them.

Data Source : cashlessindia.gov.in

Porter’s Five Forces Analysis on M-Wallets

Logo Source : cashlessindia.gov.in and Google Play Store

The Porter’s five forces framework applied to the M-Wallets yields some interesting results. The threat of substitutes is high as we have already analyzed. India is going through a digitization phase and myriads of such product are flowing in to the market. The threat of new entrants to the market is high because of the low investment and infrastructure needed to start a FinTech business. Also the entry barriers are less since the Indian Government allows 51% FDI in multi-brand online retail and 100% FDI in single brand online retail. Also the Government has been supportive of the idea of digital payments as a whole.

Buyer power for M-Wallets is medium and there are concrete reasons for this. In today’s India, consumers have many M-Wallets to switch to. They observe the best deals and switch even for a small transaction benefit or cashback. However, Since the demand for digital payments have increased tremendously because of the cash crunch, consumers still have little say in the pricing since it is mostly demand driven.

Supplier to M-Wallet companies are various retail companies that sell their products online, small stores and vendors who provide services and goods to the customers, companies which provide mobile and DTH recharge services through wallets and so on. Since these companies need a medium to sell their product and M-Wallets are a great facilitator to this, supplier power is low. However since the suppliers can choose any M-Wallet to accept the payment from the buyers, cost of switching is low.

“There might be few POS machines, but most of them have smartphones, which have become the new medium of payment,”
— Bipin Preet Singh, founder and CEO of MobiKwik

Analysis of growth hacks

“Companies who form strong user habits enjoy several benefits to their bottom line.” — Nir Eyal, Author of Hooked

The Era of Cashback

Let us talk about the major players — Paytm, Mobikwik and Freecharge. Paytm has the first mover advantage and they have created a large user base by capitalizing on this. Mobikwik seems to be happy taking the second mover advantages by using the awareness and reach already created by Paytm and Smartphone growth.

Cashback has always been the USP of Paytm. The image which they have been able to create in user’s mind, that if they do the “Paytm Karo !” thing, they will eventually end up paying lesser than a traditional digital payment facility. Mobikwik’s popularity grew leaps and bounds after they announced 100% cashback when Narendra Modi says the word “Mitron”. The wave of cashback which was started not long ago, is already reaching great heights. Today’s youth has started to expect a cashback for almost everything they pay for, digitally. M-Wallets have been at the forefront to reap the benefits of ‘The Cashback growth hack’ !

Demonetization

24 hours after Prime Minister Narendra Modi announced the note ban, Paytm published a blog post titled “Just another day at Paytm” and in the blog they said “ People will now judge you by the size of your Paytm Wallet… Just saying.” Amidst India’s great demonetization drive, the big beneficiaries have been the M-Wallets. The number have gone up for other FinTech companies also. Demonetization has been wisely used by the FinTech companies as a surprise growth hack.

“Demonetisation has changed the entire mobile wallet industry and suddenly, there is a huge demand and acceptance of our services,”
— Mrinal Sinha, COO at MobiKwik
Source : India Today

Mobikwik also claims that the app traffic to the “near me” feature that allows users to find retailers that accept MobiKwik too has gone up by 2500 %. All of them, from Paytm to Mobiwkik to Freecharge, have temporarily dropped the transaction fee they charge from merchants. They have also come out with various ways to quickly enable the service at shops and retailers.

The Online Bill Payment

Before M-Wallets began to do it, it was unheard of, that you can actually avoid standing in long queues to pay your monthly bills, specially at Government offices. Nobody wants to walk in to the electricity office to pay the bill, or what could be even worse is when a power cut happens because the due date was 3 weeks ago. These look like normal everyday problems, but actually were immense pain areas for customers. M-Wallets were the first to think that if a mobile bill can be paid online, so can be the electricity or municipality or even EMIs and insurane premiums. This was such a relief that it grabbed the millennials as well. The growth hack here was to ‘fulfill the basic necessities of the customer’

Marketing and Media

Before the term ‘growth hacking’ became a buzzword, Freecharge partnered with TVF ( The Viral Fever a YouTube Channel ) Qtiyapa, and got featured in one of their episodes on mobile recharge. Later, Paytm also associated with TVF and gained a lot of popularity through their videos.

Courtesy : TVF youtube channel

M-Wallets have used Media and Advertising wisely to gain enormous popularity. They have been able to attract their target audience, the tech savvy youth, and this have served to be the ‘Marketing growth hack’.

Conclusion

We have done enough analysis now, so I will keep it simple here. Post Demonetization there has been a spur in Mobile Wallet adoption. Different companies and different reports may state different numbers, but everyone of us have felt the change. If the reports are to be believed the industry will touch Rs. 30,000 cr by 2022. (source : hindubusinessline). While there exist difference of opinions regarding the future of M-Wallets, the growth wave that they are riding on, given that the Government has no plans of taking back the note ban, all I can say is future looks bright. However, the wallet providers need to adapt to the fast changing conditions and come up with innovative solutions to stay on top this wave. The value proposition of a mobile wallet is not about the payment, but the value-added services that can be offered across a mobile-enabled environment. Mobile Wallet adoption in India can be seen as a ‘bubble in the making’ where no one wants to be left behind.