Mobile wallet market to witness double digit growth rate by 2020

Mobile wallet is a service which is often confused with mobile banking. Mobilewallet has a much broader concept which includes using a mobile phone as a mode of payment, rather than depending on hard cash or debit/credit cards. In India, themobile wallet market is projected to witness double digit growth rate over the coming five years. eTailing India's recently launch its first white paper on India Mobile Wallet Market. Please find below a note for your perusal. I hope this will interest you.

Ashish Jhalani of eTailing India explains, “ In mobile prepaid wallet, costumers do not require to follow the three layers of security for payment which are required while using a debit/credit card or through net banking. Wallets are one click payment solution. This leads to more success rate of payments (around 95%) when compared to transactions through debit/credit card.”

Mobile wallets are regulated by the Reserve Bank of India (RBI) except for those which are used for transactions with one merchant. Wallets can be categorized into two categories namely, open and semi closed. Open wallet has a bank as a shareholder and on the other hand semi closed wallet is not linked with a bank. For instance, M-pesa has both kind of accounts, an open as well as semi closed wallets. A semi-closed wallet doesn't allow the consumer to withdraw cash, but an openwallet linked to a bank does.

Paytm Wallet which was launched in 2014, presently has 10 million users who have already downloaded the paytm wallet and the company is expecting to reach more than 50 million wallet downloads by 2015. QwikCilver which is a gift card and other stored value solutions provider in India got its license in 2013. In the fiscal year 2014, the company did business worth INR 400 crore and is estimated to deal with INR 1,000 crore of money loaded on prepaid wallets by next year said by the co-founder of the company.

Mobile wallets are a good alternative to cash-on-deliveryIndian eCommerce companies prefer to settle refunds to its customers throughwallets. Some of the companies refund the amount by crediting points or by crediting money worth of that amount into customer's account which act as walleton the portal. For instance, PayU India presently runs PayuMoney

Global mobile wallet market In U.S. PayPal dominates the market followed by Google wallet and Master card PayPass Wallet. In Europe EE, MasterCard, PayPal and Visa are the key vendors. eServGlobal, MasterCard, MFS Africa, Western Union and World Remit are some of the key players in the African market. Some of the key players in the Asia Pacificmarket are DIMOCO, PayOne, Monitise and FreedomPay etc. Some of the other major players in this market are Blackberry, American express, Visa Inc, and Samsung among others. PayPal, Google and ISIS are the major mobile walletprovider globally.

PayPal and Google together accounted for more than 60% share of the pie.In the Indian market the competition for mobile wallet will become more aggressive in future. Rising penetration of smart phones along with increasing number ofmobile wallet service providers in the Indian market is pushing the growth forward. If the banks do not focus on enabling excellent mobile wallet services for its customers, they will have to risk losing out to competition. On the other handmobile operators must widen their services and influence the existing services to attract new customers and maintain their present customer base. In this large and diverse market the mobile wallet service providers are required to differentiate their strategy to increase their customer reach.