eTailing India Launches India Mobile Wallet Market - 2015

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www.etailingindiaexpo.com

India MobileWallet Market

The Indian eCommerce industry is projected to witness double digit growth rate over

the next five years. There is a lot of excitement for the future growth but hand in hand

a lot of skepticism revolves around the current lag in growth due to a bleak economic

climate but more so from the “Winner Take All” business model. As the “Winner Take

All” models are abandoned and ventures restructured to build sustainable

enterprises, the need for knowledge and best practices becomes even more

essential.

In our series of white paper we will attempt to “decode” the eCommerce landscape in

India. In this white paper we have attempted to create an introduction to the current

Indian as well as global mobile wallet market. We have looked at factors driving the

market growth as well as restraining the growth. We have also touched upon on the

key strategies adopted by the players to sustain in the market.

We believe our series of white paper will provide an in-depth look into the

eCommerce industry and its inner workings. We believe you will find each white

paper very insightful. We welcome any feedback and insights that may help us

develop this white paper to be more true and relevant to the ecosystem. We are

excited to be part of an ecosystem that has such energy and excitement for what is to

come.

Ashish Jhalani

Founder & CEOeTailing IndiaEmail: [email protected]: +91- 99870 78084

Foreword

Report on the India Mobile Wallet Market

Table of Content


Page 4

Market Growth Rate

Page 5

Service Provider

Page 6

Conclusion

Indian Market Global Market

Page 1

Introduction

Page 1

Type & Regulation

Page 2

Applications

Page 2

Service Provider

Page 2

Key Companies & Strategy

Page 3

Market Growth Rate

Page 3

Drivers

Page 3

Restraints

Page 7

About the Authors

Page 8

Disclaimer

IntroductionMobile wallet is a service which is often confused with mobile banking. Mobile wallet has a much

broader concept which includes using a mobile phone as a mode of payment, rather than depending on

hard cash or debit/credit cards. In India, the mobile wallet market is projected to witness double digit

growth rate over the coming five years.

In mobile prepaid wallet, costumers do not require to follow the three layers of security for payment

which are required while using a debit/credit card or through net banking. Wallets are one click payment

solution. This leads to more success rate of payments (around 95%) when compared to transactions

through debit/credit card.

Most often mobile wallet is confused with mobile payments which requires electronic device using near-

field communication (NFC) chips inside smart phone and tablets to transmit information about

payments. When a customer uses its smart phone or other electronic device to make payments using a

mobile, they open an application and enter a PIN. Then according to their choice they select an account

from where transaction has to be made, along with any special offers or reward programs they wish to

apply. At the time of payment they merely tap their device to an enabled payment terminal, and the

information about the payment is transmitted.

Mobile Wallets ImpactOn eCommerce & Retail Growth In India

Page 01


Type & Regulation

Mobile wallets are regulated by the Reserve Bank of India (RBI) except for those which are used for

transactions with one merchant. Wallets can be categorized into two categories namely, open and semi

closed. Open wallet has a bank as a shareholder and on the other hand semi closed wallet is not linked

with a bank. For instance, M-pesa has both kind of accounts, an open as well as semi closed wallets. A

semi-closed wallet doesn't allow the consumer to withdraw cash, but an open wallet linked to a bank

does.


Service Provider

The companies mainly providing mobile wallet services are telecom companies such as Vodafone Plc's

m-pesa, Tata Teleservices Ltd's mRupee, Bharti Airtel Ltd's Airtel Money and Aircel's Mobile Money.

Other application development firms are also increasing their presence in this segment such as

MobiKwik and Paytm

Page 02


Applications

There is wide range of applications possibilities for mobile wallet in the Indian market such as banking,

communication, transport, ticketing and even paying at petrol pumps. In terms of usage they are still at

the evolving stage. But mobile wallet is considered to be the next big thing in monetary transactions in

the Indian market.

Mobile wallet market by applications includes services related to banking transactions, transferring of

money, and value added services such as ticketing, recharge, shopping, and bill payments and others.

Among all these applications transferring of money accounted for major portion of the pie with more

than 30% share followed by recharge and bill payments and utilities areas.

Key Companies & Strategy

Paytm which was launched in January 2014, presently has 10 million users who have already

downloaded the paytm wallet and the company is expecting to reach more than 50 million wallet

downloads by 2015.

Flipkart, India's largest eCommerce firm is now looking to tie up with third party vendors to launch its

semi closed wallet. This move came after Flipkart payment gateway PayZippy was not granted a wallet.

QwikCilver which is a gift card and other stored value solutions provider in India got its license in 2013. In

the fiscal year 2014, the company did business worth INR 400 crore and is estimated to deal with INR

1,000 crore of money loaded on prepaid wallets by next year said by the co-founder of the company.

Indian eCommerce companies prefer to settle refunds to its customers through wallets. Some of the

companies refund the amount by crediting points or by crediting money worth of that amount into

customer's account which act as wallet on the portal. For instance, PayU India presently runs PayuMoney

Wallet a service which has more than 30,000 merchants live and accepted more than 50 eCommerce

sites such as Jabong, RedBus, Groupon, Bookmyshow and many others. It is a service in which users can

store card data and get reward and money back points on using its services.

Market Growth Rate

The Indian eCommerce market is projected to grow more than USD 100 billion over the coming years.

This growth is mainly attributed to the increasing use of smart phones. With the rising use of mobile

phones by the customers to shop online, e-retailers and payment companies are planning to launch

more digital wallets. This will not only offer consumers a convenient and comparatively faster way to pay

but will also reduce their dependency on sales linked to cash on delivery (COD).

Drivers

High penetration of smart phones, greater accessibility and convenience; along with numerous offers

and reward points by the eCommerce companies is attributing towards the growth of the wallet market.

Virtual wallets will bring hopes to people who do not have bank accounts such as students or

homemakers. This means that even a customer who does not have a bank account or who lacks access

to banks can use mobile wallet to make transactions.

Restraints

Consumer's concern related to the mobile wallet such as what if the mobile battery is down the mobile

wallet will not be accessible and connectivity issues in some areas are the factors restraining the growth

of the market. Moreover, as per the guidelines by RBI the transaction amount is restricted to INR 10,000

per day and the cumulative value of INR 1 lakh in a month is another factor impacting upon the market

growth.

Page 03



Market Growth Rate

The global market for mobile wallet is projected to grow more than USD 1400 billion with a double digit

growth rate over the coming five years. By regions, Asia Pacific is projected to be the fastest growing

market followed by EMEA region. African countries are the major contributor towards the growth of

EMEA region due to lack of monitoring and regulations for mobile enabled payments. Whereas in Asia

Pacific region China is the market witnessing extraordinary opportunities and growth due to initiative

taken by the government to promote and support mobile wallet among various applications.

Furthermore, South Korea and Japan is the leading region in the adoption of mobile wallets due to being

one of the most advanced mobile cultures in the world and with the rapid adoption of mobile banking

services in emerging regions such as Indonesia, and Philippines. U.S. has the largest number of population with the smart phones adoption but still it lags behind other

regions in mobile wallets. This is changing due to many promising initiatives underway in both Canada

and the U.S.; Companies and Consortiums such as Isis, PayPal, Google, MCX, and many others are

competing to acquire major share of the pie each with a different approach to the market.


GLOBAL MARKET

Page 04

Service Provider

In U.S. PayPal dominates the market followed by Google wallet and Master card PayPass Wallet. In

Europe EE, MasterCard, PayPal and Visa are the key vendors. eServGlobal, MasterCard, MFS Africa,

Western Union and World Remit are some of the key players in the African market. Some of the key

players in the Asia Pacific market are DIMOCO, PayOne, Monitise and FreedomPay etc. Some of the

other major players in this market are Blackberry, American express, Visa Inc, and Samsung among

others. PayPal, Google and ISIS are the major mobile wallet provider globally. PayPal and Google

together accounted for more than 60% share of the pie.

The global market for mobile wallet is projected to reach USD 1497.2 billion by 2018. Whereas, the

Indian market for mobile wallet is projected to reach USD 185.4 million by 2018.

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2013 2014 2015 2016 2017 2018

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Global Market/Billion India Market/Million

Source : eTailing India Estimates


GLOBAL MARKET

Page 05

Conclusion

In the Indian market the competition for mobile wallet will become more aggressive in future. Rising

penetration of smart phones along with increasing number of mobile wallet service providers in the

Indian market is pushing the growth forward. If the banks do not focus on enabling excellent mobile

wallet services for its customers, they will have to risk losing out to competition. On the other hand

mobile operators must widen their services and influence the existing services to attract new customers

and maintain their present customer base. In this large and diverse market the mobile wallet service

providers are required to differentiate their strategy to increase their customer reach.


GLOBAL MARKET

Page 06

About the Authors


eTailing IndiaeTailing India's vision to Become India's Leading Knowledge Repository for the Indian eCommerce

Industry .

eTailing India's vision with the venture is three parts - Media, Events & Research.

All three arms will solely concentrate in eCommerce. Media arm will be working towards building an

online collaborative community (http://www.etailingindia.com) and a print publication (eTailing India -

Monthly Publication). The events arm will focus on holding industry related conferences, workshops

and webinars.

The research arm will aim to publish white papers, research reports and case studies that are relevant to

the industry. Combined we plan to achieve what our slogan says “Voice of Indian eCommerce”.

Siddharth GaurPartner & DirectoreTailing IndiaEmail: [email protected]: +91-86928 44460

Sonal SapraSenior Research AnalysteTailing IndiaEmail: [email protected]: 1800-102-9086

Page 07

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Disclaimer

Page 08

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