Mobile Wallet Gains. But will it Sustain?

App-based wallet services face a threat from primary players such as banks, e-commerce portals and telcos launching their own apps.

-wallets have become increasingly successful and popular particularly in 2014, in India. Though the use cases are still limited as well as the potential base, the acceptability has been encouraging. Compared to adoption of other non-cash forms like Credit Cards and Debit Cards, the acceptability has been quick and the confidence high essentially on the security side.

At the same time, the enabling ecosystem that includes data connectivity, smartphones, cards, e-banking, etc., has seen a phenomenal improvement in deliverance and quality over past few years that has made the environment for m-wallet growth only conducive.

From the use case side, the sprouting of e-commerce and its quick extension of m-commerce has been the foremost enabler facilitating in the completion of transaction. Very recently the integration of wallets with radio taxi services has been another great contributor to their increased use.

Primarily the market at the moment is driven by app-based wallets with Paytm leading the space. Experts peg the number of transactions in a month in 2014, using all forms of wallets to have been a little over 100 million of which Paytm claims over 60 million are happening through its wallet services. The Gross Transaction value of wallet transactions is estimated to be around $800-850 million of which Paytm reports that its transactions valued over $600 million in the previous year.

While, the app based wallets are increasingly becoming popular and we are seeing several wallets emerging in the market, their sustenance remains a big issue. With the entry