While the jury is still out on the negative and positive impacts that ‘demonetisation’ had on the Indian economy, there is no doubt that it did fundamentally alter the way Indians looked at money. Mobile wallets, grew exponentially as people tried to find various ways and means to do transactions. Suddenly smartphones, tablets, phablets and other similar electronic devices which were used to browse social media, interact with people, play games etc. suddenly become a way to trade goods and services for money.

One97 Communication Limited (the brand behind Paytm) was the undisputed market leader in India mobile wallet market with a revenue share of over 61% in 2015, followed by MobiKwik & ITzCash. Post demonetization, the average transaction value increased by 200% and the number of mobile app downloads by 300% across the country. In addition, the company also registered 1000% growth in terms of value of money added to Paytm account by the users across the country.

The major factor that led to easy adoption of mobile wallets was the availability of internet connections and ease of use. Other major factors include increasing number of merchants tying up with mobile wallet companies to ease payment process for customers, acceptance of mobile wallets among consumers themselves, steady rise in disposable incomes etc.

There are several challenges that a promising mobile wallet market in India faces. For one, data post-demonetization suggests that a majority of transactions during demonetization were done using credit and debit cards. A large part of the middle class still considers potential mobile wallets as an afterthought, something to be used in case of emergencies etc. are rather than being routinely used to carry out transactions. A lot of people in general are very weary of cybercrime and prefer to do their business with treasury bills rather than with either credit cards or through mobile wallets. Mobile wallet companies will have to redress a lot of such issues going forward if they wish to establish a strong say in how India conducts online transactions. Strong competition between different mobile wallet companies (and the government) also underpins the challenges faced by private players, to a certain extent.

While there may be no doubt that since demonetisation the ardour the public had for mobile wallets has cooled off to a certain extent, big companies such as One97 Communication Limited, One MobiKwik Systems Pvt. Ltd, ItzCash Card Ltd., PayU India Internet Pvt. Ltd. etc. have also smartly rejigged their overall strategy to suit the current clime. While there has been a certain amount of attrition given that there were some consumers who had taken to such companies only on a temporary basis, a lot many others have included mobile wallets into their basket of cash and cash equivalents which includes credit and debit cards, checks and now, mobile wallets.

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