Mumbai: The new age mobile wallets are facing a tough challenge from the credit/debit cards, said a sectoral expert.
According to Deepak Chandnani, CEO (South Asia and Middle East) of Worldline, “The number of transactions on credit and debit cards have grown by eight per cent quarter on quarter in December 2015, and ecommerce has grown by 16 per cent, aided by the festive season of the last three months.”
As of October 2015, there were 63.8 crore cards in use in India. Of which, only 2.28 crore are credit cards and the rest are debit cards.
Today, more transactions are happening on wallets than on credit cards. But the average transaction size on the credit card is Rs 3,000 whereas on a wallet the average size is Rs 300, said Mr Chandnani, adding that there is some way to go before wallets can prove to be serious competition for debit cards going by sheer numbers and for credit cards going by the pattern of usage.
Pradeep K. Sampath, COO at MMP Mobiwallet Payment Systems Limited, is aware of this as he says “The acceptance of mobile wallets is far more challenging as this technology and its players have to first begin with creating an ecosystem.”
Bank of America has said that mobile payments will form 10 per cent of the total payments in India which was just 0.1 per cent in financial year 2015. The two major challenges the sector has to contend with are engaging a customer and getting transactions done through him/her and getting more merchants on-board.
He says the downsides of theft and loss associated with credit and debit cards has contributed to the increase in scope of mobile wallets. In-store purchasing process has become simpler with mobile wallets as one has to no longer stand in long queues and instead can chose to pay via a tap or scan of a mobile device and these advantages will propel the usage of mobile wallets.
