The M-wallet: Is this the making of another bubble?


India is witnessing a growth in the area of digital payments. With the increasing internet and smartphone penetration, we are set to witness a massive surge in the adoption of digital payments in the coming years. Moreover, government initiatives such as Digital India will act as key impetuses. The m-wallet segment embraces money transfer, shopping, ticket booking, bill payment & recharging.

The m-wallets industry will play a vital role in the future growth of the country’s digital payments and will be determined by:

  • Reaching the untapped market
  • Further focuses on merchants with multichannel payment services
  • Payments through NFC
  • M-wallet can cater to financial inclusions
  • Data analytics will be a major source of payments-related revenue
  • M-wallet will increase remittances in developing countries

Many players in the financial services, e-commerce & lifestyle segments have their own m-wallets, like ICICI Pocket, SBI Buddy and BookmyShow’s own wallet, to name a few….

Now the question is, whether it’s the making of another bubble?
The USP of a mobile wallet is not about the payment, but the value-added services that can be offered across mobile devices. To survive in a competitive environment, these players are coming out with very attractive offers and impractical discounts. The first question to ponder upon is; in the name of customer acquisition/retention, can this strategy be justified or whether it’s going to last for long? Even though new players may acquire customers, with numerous deep-pocket players in the market, Can they still continue to attract customers? The second question is; will these customers be loyal?

Buoyantly, with the launch of Apple Pay and Google Wallet with their decision to support barcode and app-based payments all the uproar will fall into place and the payment at most of the merchants will be restructured and standardized, leading to an enhanced experience for customers.

But there are still a lot of questions unanswered. Let’s wait and watch!!!!!

– Prof. Anish K. Ravi

* Views expressed are personal.

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