Leading the cashless charge
Evolution of the digital wallet industry in India
In this report, we hope to provide a baseline understanding of the industry and its dynamics to the reader. We highlight the competitive nature of the market, while shedding some light on its predicted future trajectory and the challenges that the industry must overcome in order to continue its growth momentum.
The mobile wallet industry has been on a rapid growth trajectory as India moves to a less cash-dependent state. The value and volume of mobile wallet transactions more than doubled in the last year alone and as such the industry is leading the charge to making India a cashless economy. Increased adoption of smartphones and mobile data packages has been one of largest contributors to this growth and as the penetration of the technology increases and mobile data costs come down, the industry is primed for further growth.
The mobile wallet market has also benefited from a favorable regulatory environment, with policies of the government promoting alternative modes of payment to the traditional cash transaction. The growth in the industry has been further spurred on by demonetization as prepaid payment instruments (PPIs) went from 10 percent to 22 percent of total digital transactions in the months following the policy announcement.