Queue to enter Indian prepaid card and mobile wallet continues to increase

Print

Email

Mobile wallet and prepaid cards have been posting strong growth in India. The mobile wallet market in India is estimated to reach US$1 trillion by 2021, while prepaid card is expected to reach US$ 68.2 billion by 2021.  Consumers are primarily using mobile wallets for performing banking transactions, booking tickets, and pay bills. Latest applicant is PayPal, the US-based payments firm, which is considering grabbing a pie of mobile wallet space in India as it applied for prepaid payment instrument (PPI) license.

In March 2017, the Reserve Bank of India (RBI) has offered PPI license to Amazon. RBI has ceased to offer PPI licenses post September 2016 as the organization is modifying policy regulations in this field. After demonetization in India in November 2016, the adoption of mobile wallets in the country has risen to a large extent. Earlier in 2017, it was speculated that PayPal was aiming to acquire FreeCharge, Snapdeal owned mobile wallet firm and Flipkart owned PhonePe. However, no official confirmation is available on this deal as of now.

Mobile users prefer to use such platforms that offer seamless payment services such as wallets enabling customers to make payments via biometric authorization. Samsung, for instance has launched its mobile wallet Samsung Pay in India in April 2017.  However, currently the service is supported on mid-range and high-end devices, making the feature are available to limited users. It is expected that RBI will lay down stricter policies for PPIs in the country and outline KYC norms as well. It would be interesting to watch how these mobile wallet firms manage their expenses as these regulations will ultimately impact their customer acquisition costs and operational expenses.

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