Source: News Bharati English23 Nov 2016 12:40:38
New Delhi, November 23: Mobile wallet generally refers to the payment services operated and performed mobile devices. Instead of paying with cash, cheque or credit cards, a consumer can use a mobile phone to pay a wide range of services and digital and hard goods. Online companies like PayPal, Amazon, and Google Wallets have mobile banking options. The Associated Chambers of Commerce & Industry of India ASSOCHAM-RNCOS joint study suggested that companies operating in the mobile-wallet sector should take measures like providing effective, secure , private and reliable services, data back-up system and others to spread awareness among people.
“Crystal clear policies and a common regulatory body for all m-wallets are required to bring clarity in procedures and policies between m-wallet companies and the Reserve Bank of India (RBI),” suggested the study titled ‘Indian m-wallet market: Forecast 2022,’ conducted by ASSOCHAM jointly with research firm RNCOS. The m-wallet companies must develop a common platform for their application to save money and time as this would ultimately result in reduction in cost and expansion in user base and hence revenue.
Privacy is another issue as for all kinds of monetary transactions and other such services one needs to disclose his/her identity, which might create a huge problem if the hackers hack the security or wireless transmission and obtain all the information related to the social or financial matters.“A strong authentication mechanism must be put in place to bind the identity of the user to the authorization of the transaction thereby being extremely mindful of authentication and risk assessment,” said Mr D.S. Rawat, secretary general, ASSOCHAM while releasing the findings of the study.
M-wallet market accounts for 38 % share followed by recharge and bill payments for mobile, DTH, landline, electricity and other such services and the remaining share of 31 per cent is captured by online shopping, hotel/travel/movie ticket reservations, online food order, payment of insurance premium, recharging metro rail card and others.
The Indian m-wallet market in FY 2016 was around Rs 154 crore, and it is expected to grow at a compounded annual growth rate (CAGR) of 141 % during the period between 2015-16 to 2021-22 and reach till Rs 30,000 crore by the end of FY 2022 driven by growing usage of smart phones, robust mobile internet penetration, growth of e-commerce sector together with increasing disposable incomes, the study noted. It is also expected that the majority of transactions will go paperless in the next 10 years.
For all the entities to operate any kind of m-wallet there are copious of strict RBI policies which hinders the growth of m-wallet sector in India. “The present system allows only e-transfer of money and approves semi-closed prepaid instrument issuance while it does not allow ‘cash out’ from the semi-closed wallet. The RBI should relax its current policies and allow cash withdrawals from the semi-closed wallets,” suggested the study.
The consumer’s mindset is the biggest factor that hinders the growth of Indian m-wallet market, as they are more skeptical about the safety and security issues as in the case of internet banking as users worry that their devices could be hacked or attacked by some kind of viruses. “As the mobile payment space evolves, the stakeholders must create secure transactions that foster consumer trust. M-wallet companies must provide a much more secure payment authentication process out to the masses,” said Mr Rawat.
The ASSOCHAM-RNCOS study has suggested that m-wallet companies should expand their reach by offering services through agents and distributors in order to capture large consumer base. “They should establish more and more distributors or agents offices in the areas where there is poor or no internet connectivity,” it said. There is a need for technological advancement by the m-wallet companies so that their m-wallets are compatible with all operating systems and they do not have pay extra money every time to launch their application on a new platform. “There is an urgent need for m-wallet based companies to spread awareness about their services across the country regarding the major issue of lack of awareness about their usage and benefits,” study said.