Mobile Wallet Market in India 2022

The digital infrastructure in the country has developed rapidly in the past few years and created a potent technological ecosystem for the digital payments market. A mobile wallet, also known as a digital wallet, mWallet, or eWallet, is a technology by users can carry the information of their debit and credit cards in a digital form on their mobile devices. Scheduled commercial banks such as Axis Bank Limited, HDFC Bank Limited, and ICICI Bank Limited, as well as wallet service providers, including One97 Communications Limited and One MobiKwik Systems Private Limited are major players in the market.

Market insights:

Mobile wallet transaction value was INR 1,520.65 Bn in FY 2021. It is expected to expand at a compound annual growth rate (CAGR) of ~46.30% during the FY 2022 - FY 2027 period. In terms of volume, the market is estimated to reach 25.30 billion transactions by FY 2027. Mobile wallet transactions were affected in FY 2020 and FY 2021 with a growing preference for by the Bharat Interface for Money (BHIM)-Unified Payments Interface (UPI) payment system. However, at present, the market shows remarkable growth, as several wallet providers introduced attractive cash back offers at bill payments or subscriptions and offers such as no-cost EMI for e-shopping.

Market influencers:

Flourishing e-commerce sector, promotion of cashless society by the government and Rise in the number of smartphone owners and internet users in recent times are driving the growth of the market. However, increased use of BHIM UPI payments, lack of data security and trust, and of consolidation of payments across players are restricting the market growth.

COVID-19 impact analysis:

The value of e-payment transactions decreased in 2020 due to reduced business activities and lowered the annual income of people, while the volume increased significantly. In the wake of the pandemic, the National Payments Corporation of India (NPCI) encouraged customers and providers of emergency services to adopt digital payment systems to ensure safety of contactless transactions. Mobile wallet transactions were mostly used in sectors such as e insurance, essentials, donation, online education, and media/entertainment during the pandemic. The usage of mobile wallets witnessed negative impact in sectors such as travel, tourism, consumer durables, apparel, and restaurants. People prefer digital to physical modes of payment because of the fear of infection. This has ramped up the use of mobile wallets.