Mobile Wallets Facing Competition From The Website / Card Combination
While there was a lot made out of mobile payment systems in India following the recent demonetization effort that saw around 80 percent of the country’s currency rendered worthless, it turns out that mobile wasn’t the first stop for many users. Reports note that mobile wallets did see some hefty gains, but the big winner turned out to be the combination of cards and websites.
Granted, mobile wallets have been on a tear in recent months; mobile wallet transactions have increased nine-fold in just two years, according to word from Morgan Stanley. The same word put mobile wallet transactions at $9 billion in April 2017. However, for urbanites—and this is a large part of India—the combination of debit and credit cards, websites, and even the occasional use of cash on delivery is still proving to be the leader ahead of the mobile wallet.
The word from an ET-RICS Retail Banking report puts these measures, along with internet banking, as the current leaders in the Indian market. Urbanites surveyed preferred internet banking in 33 percent of cases, while 25 percent preferred debit card. Close behind that was 23 percent who preferred credit card, and eight percent preferring COD. Only five percent found mobile wallets their weapon of choice.
That may not sound like much, but you have to remember the numbers of people we’re dealing with here. India has a total population of around 1.3 billion. Of that, about a third—32.8 percent—is urban. That means that we’re dealing with a population of around 300 million urbanites, give or take. Just five percent of that number favoring mobile wallets means a market of 15 million people, and that’s assuming the study’s numbers hold constant over the entire population.
Granted, that’s well behind North America’s 90.65 million in 2016 based on Statista figures, but still a pretty hefty market. It also doesn’t really factor in the ruralites who might well be more open to mobile payments, since they may well lack the necessary infrastructure to use straight computer systems like the urbanites use.
Demographics often play a part in technology use, but it’s clear that mobile payments systems still have a ways to go to be truly mainstream.