Product Adoption Life Cycle for Mobile Wallets in India

Product Adoption Lifecycle of Mobile Wallets in India

Introduction
A mobile wallet is a way to carry your credit card or debit card information in a digital form on your mobile device. Instead of using your physical plastic card to make purchases, you can pay with your smartphone, tablet etc.
Consumer loads money into any of the selected mobile wallet by transferring it from bank account using net banking, credit / debit card.
How mobile wallets works
1. Download the mobile wallet app (or it may be already built into your mobile device).
2. Add your credit card or debit card information to the mobile wallet.
3. When you check out at participating merchants, access the mobile wallet and choose your card. If you’re making an in-store purchase, just hold your mobile device at the terminal.
Some examples of the mobile wallets are Paytm, PayU, MobiKwik, Freecharge, Oxigen, Airtel Money, Jio Money etc.

Where does it lie in product adoption curve?
Owing to the security concern and less acceptability by the vendor side (at the actual Goods and services providers) Mobile wallets would have been in the Laggards or the Late Adoption Cycle, but thanks to the Demonetization drive by GOI, it has given the Mobile Wallet companies the jump of their life time. The push all have been waiting for. Hence we can now safely say that Mobile Wallets in India is in the Early Majority curve of life cycle.

Profiles of Early Adopters / Early Majority
The profiles of Early adopters would be the Tech Enthusiasts or the people from age group of 15–23, who are young, bubbling with energy, want to discover something new, bored of carrying a card / wallet or too much cash in Hand. 
The ones who would keep looking for Online offers and best proposals for e-commerce buying or cashbacks that are offered by the Mobile Wallet companies. 
The early majority profilers are the little mature and more matured professionals or businessmen who got into these may be via a compulsion due to Demonetization drive and/or to try adopt the technology advances that the payment system are going through. These profiles are more interested in the ease of getting the work done, be it paying the Mobile, Electricity, DTH bills, or payment of Food or other e-commerce bills.

Factors and challenges which affected rate of mobile wallet adoption
One of largest factor that hinders the growth of Indian mobile wallet business, is because the consumers are more skeptical about the safety and security issues. These are the same fear, when internet banking was introduced and the users were worried about the hackers, money lost or virus issues etc. Often people complain that their money has been debited but the transaction got declined while transacting via mobile, and to avoid such problems users keep away from using mobile wallet related services, it added.
As with the cars or related products, even the M-Wallet service providers are trying to create their own eco-systems to gain, grow & retain the customer base by integrating additional features like promotions, payback offers, own marketplace etc.
There are very few neutral M-wallets like the PayTM, Oxigen, SBI Buddy, ICICI Pockets etc. which have the facility to be paid and redeemed across all merchants be in Mobile, or DTH, or any other utility bills or Uber or Food etc. On the other hand, the Ola Money, swiggy wallets etc cash once loaded in these wallets can be used only for their products and hence it gets locked.
Not only the service providers, even the users have to make complex decisions in advance before committing to these M-wallet providers, after all you you cannot change your baseline of payments mode every month or week.

Growth and product adoption comparison with other payment methods 
Source: Economic Times
The product adoption of a specific mobile wallet or a digi payment method depends on a lot of reasons like
1. Time taken to complete a transfer/payment; 
2. The maximum amount you can transfer; 
3. The financial details/information (e.g. account number etc) that you need to complete the transfer; 
4. How is the transaction validated/authenticated; 
5. Whether you will earn interest on the money kept in reserve in the payment system?
6. What all infrastructure is required to honor transactions?
7. Am I receiving any complementary offer of cash back etc with payments. 
Now with GOI launching the mother of all M-Wallets “The Aadhaar Payment App”, it would be very exciting to see whether this product can beat the chasm here and go-on to become not only India’s but the world’s largest payment app.

Growth & Growth Hacks
Source: First post
At a compounded annual growth rate of 141% the mobile wallet market in India may reach Rs. 30,000 Crore by 2021–22
The growth, during 2015–16 to 2021–22, would be driven by growing usage of smartphones, robust mobile internet penetration, growth of e-commerce sector together with increasing disposable incomes, said the study by the Associated Chambers of Commerce and Industry of India and research firm RNCOS.
The Indian m-wallet market in 2015–16 was around Rs 154 crore.
With the GOI also focusing on a less cash economy and promoting various mechanisms to achieve, M-wallet transaction is among the fastest growing paperless modes of payment or banking, and it is expected that the majority of transactions will go paperless in the next 10 years. While mobile wallet service contributed to 21 percent share in mobile payment volume transactions in FY16, its share is expected to increase to 79 percent by FY22.
It would also be interesting to watch if RBI relaxes the rules further for m-wallets and allow them for cash withdrawals etc. The current format only approves the e-payment system of m-wallets. 
Apart from the clear policies and regulatory body governing these M-wallets. There is definitely a need for a strong authentication mechanism to bind the identity of the user to the authorization of the transaction thereby being extremely mindful of authentication and risk assessment. This would help in implementation of all the growth hacks possible.

Some of the growth hacks that come across.
1) Cover more and more utilities and services under the payment umbrella
2) Use Payments to build the network.
3) use schools and institutions where the investment is 100% done in cash or cheque
4) Target hospitals payments via Mobile wallets, With KYC and other procedures implemented the M-wallets can now be expanded to 1 Lakh. 
5) Policies of RBI over cash withdrawals would definitely be instrumental in growth of M-Wallet
6) Penetration of Smart Phone and 3G/4G network and help building it is definitely.
7) Users First and pay later model. For eg. WeChat: Since payments are done between two people, if you already have a large set of users on your network, payment becomes pretty easy. This is the route now being tried by Facebook, Google and other leading companies with large network of users.

Summary
Mobile Wallets in India have a very bright future. The companies who are burning cash right now to lure the customers has to expand their user base and also the spending limits. As projected, the mobile wallets can easily grow and even if there are 30 companies in India and assuming everybody gets an equal pie, each company would still be valued at 1000 crores. 
M-Wallets now needs to play a much bigger and better meaning role, than just a tag of ‘Re-charge wala Bhaiya’.
It would be interesting to see how these mobile wallets by defining which is operational as a format throughout the world, takes the ‘Mother of all Payment app’, which is the Aadhar based payment app “BHIM Aadhar Pay App” launched by GOI on 14th April. A lot of thought has gone in the Aadhar based payment app and surprisingly it doesn’t require any of the smartphone or the Internet dependency.