Mobile wallet companies in India and other global markets target personal loan segment to drive growth

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Popularity of mobile wallets has grown significantly in past couple of years across the globe. Services provided by mobile wallets have expanded from fund transfers and bill payments to online shopping, in-store payments and POS purchases.  Increased adoption of mobile wallet and payment system has been propelled by providing financial services to unbanked population across the globe. In recent quarters, mobile payment companies have been venturing into new segments offering financial services, targeting unbanked and underbanked population. Loan services are yet another addition to their service line. Global mobile wallet market is expected grow at a CAGR of 43.5% from 2015 to 2020 with major growth expected in Asia Pacific and EMEA regions.  There have been a series of launches in mobile payment market in India. According to PayNXT360, the Indian mobile payment market is expected to record a CAGR of 50.1% during 2016-2020 to reach US$ 48.3 billion in transaction value terms by 2020. In 2016, the market is expected to register growth rate of 57.6% over 2015.

• Earlier this year, Paytm initiated unsecured loan providing services to local merchants in India who otherwise could not get a loan from banks due to absence of credit profile. Paytm provides loans to merchants based on wallet usage history and loan amount ranges from USD 750 to USD 1500. Interest rate of these loans is usually 12% and Paytm has already partnered with major financial institutions and NBFCs to fund these loans. Paytm currently has a user base of 125 million.
• MobiKwik has started offering short term loans in October 2016 in India ranging up to USD 750. Currently, MobiKwik has more than 35 million users and 1 lakh merchants and aims at targeting customers who do not have access to credit.
• Ant Financial Services Group, which is an affiliate of Chinese Alibaba Group provides complete range of financial services including money market fund, P2P lending and microloan program. Earlier this year, it announced funding Hong Kong based start-ups who want to do business on Alibaba platform. It is working towards Sesame development that will facilitate credit score assignment based on transaction data for loan approval.
• Payment solution provider Square provides loans to merchants without any application. Loan offering is based on the transaction history of the merchant and repayment is channelized from transaction stream itself.

 To know more and gain deeper understanding of mobile payment industry in India, click here.