Mobile wallet usage is growing at a robust pace in India and is gradually displacing traditional payments such as cash and cards. Payments through mobile wallets are anticipated to grow at a compound annual growth rate (CAGR) of 23.9% between 2023 and 2027 and reach INR472.6trn ($5.7trn) in 2027, forecasts GlobalData, publishers of EPI.
According to GlobalData, the value of mobile wallet payments grew at a robust CAGR of 102.7% between 2018 and 2022 to reach INR128.2trn in 2022. The Covid-19 pandemic further accelerated the adoption of mobile payments in India, as consumers increasingly opted for touch-free payments.
Kartik Challa, Senior Analyst Banking and Payments at GlobalData, said: “While cash has traditionally been the most popular method of payment among Indians, its use is gradually on decline. This is mainly due to India’s concerted efforts to promote digital transactions, most prominent being Unified Payments Interface (UPI). Mobile wallets have benefitted the most from this push and have become the preferred choice for payments in India.”
UPI has now become one of the most preferred methods for day-to-day payments. Launched by the National Payments Corporation of India (NPCI), UPI allows customers to integrate bank account with mobile payment solution and enables instant transfers between bank accounts using mobile number or QR code, making transactions quicker.
QE code payments adoption boosts mobile wallets
The high adoption of QR code payments among merchants has also been a major factor for fast mobile wallet adoption in India. To further push mobile payment adoption, the Reserve Bank of India (RBI) made mobile wallet interoperability mandatory from 1 April 2022, enabling users to make QR code-based payments irrespective of the QR code solution used by the merchant.
GlobalData’s 2022 Financial Services Consumer Survey reveals that India is among the top countries in terms of mobile wallet adoption and usage globally. Wide mobile wallet funding options, convenience, wider merchant acceptability, and pricing benefits such as rewards and cashbacks associated with mobile wallet are some of the most important drivers cited by respondents that encourage them to use mobile wallets.
Challa added: “Driven by the government’s push towards a less-cash society, mobile wallets have become a mainstream payment solution in India. In addition, the proliferation of mobile wallet brands, robust mobile payment infrastructure, and increasing acceptance by merchants will further accelerate mobile payments in the country.”