Despite the concept of mobile wallets being fairly new in India, its rise has been rapid. The number of people using mobile wallets has surpassed the number of credit card users in the country. Paytm, the biggest mobile wallet company in India has more than 20 million active users, a number greater than the total cumulative credit card holders in the country which stands at 19.9 million (as per data provided by the RBI).
The major mobile wallet companies in India are Paytm, Mobikwik, Oxigen and Citrus. Via a mobile wallet, the user can make transactions online and offline but cannot withdraw cash. The usage of mobile wallets has become even more frequent due to demonetisation. When the 500 and 1000 rupee notes were banned by the government and the new notes were not yet ready to be brought into circulation, the mobile wallet industry boomed with people all over the country using them to make transactions digitally.
Out of all the mobile wallets, Paytm was the biggest beneficiary. It received the service licence from RBI in 2015 and has since turned one of the biggest company in the country. It has currently more than 7 million merchants and in the years gone by the company has transformed from being a mobile wallet to an e-commerce giant which offers a variety of other services. Mobikwik, another mobile wallet company, has more than 12 million customers.
Advantages of mobile wallets over credit and debit cards
With the continuing cash shortage coupled with the ease of payment that a mobile wallet offers, customers have preferred to pay for any transactions through mobile wallets. The advantages of using a mobile wallet instead of a credit or debit card are:
Secure form of payment: Transactions through mobile wallets are encrypted and secure. For every transaction through a mobile wallet, a fresh one time password is generated which is sent to the registered mobile number of the user. Then, the customer only needs to add the specific amount required for the transaction and not have to worry about remembering the PIN unlike when using a credit or debit card.
Ease of use: Mobile wallets are a one stop solution for all the payment needs and the customer is not required to carry his or her credit or debit card everywherefind credit cards in india here. Once details of the credit or debit card are entered in the mobile wallet, the transaction can be performed in three clicks.
Universally accepted by all vendors and merchants: Almost all merchants accept payments through mobile wallets. The mobile wallets also provide attractive cashbacks, rewards and gifts which has helped increase their popularity.
Loading money in a mobile wallet is a simple process: The whole process of loading money in the mobile wallet is very simple and quick. The consumer needs to download the app of the mobile wallet from the app store and then register as a user by entering the phone number, email ID and password.
Register yourself as a user of the mobile wallet immediately: To obtain a credit or a debit card, the applicant has to submit multiple documents such as payslips, PAN card, Aadhar card and address proof whereas the mobile wallet just needs to be downloaded and installed on the phone with a login ID to be created. It is as simple as creating a facebook account.
Split the bills: Mobile wallets also provide the facility of splitting bills which can come in handy when the user is splitting the bill with multiple people.
Transferring of funds without any charge: Recently, the government has also introduced the facility of transferring funds from the mobile wallet to the bank account free of cost.
With success comes responsibility
With all the advantages that using a mobile wallet has, it is no surprise that the total transaction amount on them has crossed the Rs.800 billion mark. With such huge amounts of money involved in transactions via the mobile wallets, the government has brought in stricter laws to govern the whole process. The KYC norms have become stricter with every user required to be KYC verified in order to make any transactions via mobile wallets.
RBI also raised the minimum net worth requirement for a company to operate as a mobile wallet in 2017 from Rs.1 crore to Rs.5 crore. This limit is further set for a increase of Rs.15 crore in 2020. The government has been pushing people to pay money digitally so that all the transactions can be observed and any fraudulent or suspicious activity can be tracked. Also considering how easy it is to use them for a consumer, one can only see that mobile wallets are here to stay for the long haul.