With 90% of India’s 250 million Internet subscribers accessing Internet through mobile (source: TRAI Data, June 2014), it is inevitable that the mobile payments landscape in the country is heating up.
There are more than 20 mobile wallet services in the market as per the RBI website. Typically, such services allow a registered customer to top up or recharge money, which can be used for a variety of transactions such as cellphone recharge, paying bills of various service providers, shopping online and offline and money transfer to other bank accounts or wallets.
So far, the industry has been tightly regulated by RBI leading to only modest growth. For example, out of Vodafone’s user base of 170 million, only 1.5 million are enrolled in M-Pesa. And less than one-third of these are active users (source: Case study in Business Today). RBI has recently relaxed regulations that allow entities to set up payment banks and therefore cash out mobile money directly to end users, even if they lack bank accounts. However, to unlock disruptive growth in the mobile payment services, we need to keep in mind two or three factors: