The country’s effort to go cashless has led to an unprecedented growth in smartphone digital payments.
A new study predicted that the Indian mobile wallet market will experience a growth rate of more than 190 percent by fiscal year 2022. The forecast was made as a result of research conducted by Assocham, a trade organization, and RNCOS, a business consulting firm.
The prediction was that mobile payment transactions are likely to reach a CAGR of over 160 percent per year.
That rate will continue to increase from the current fiscal year through to 2022. At that time, the mobile wallet market will be worth 250 billion, said the prediction. That is a substantial increase over the current size of the market which is estimated to be just over half a billion.
The report on the forecast suggested that there are several reasons that the use of mobile payments in India is growing exceptionally quickly. To start, e-commerce as a whole is on the rise. This is a trend occuring worldwide. Moreover, mobile internet penetration is also growing rapidly, meaning that more consumers have access to these options than ever before.
That said, the mobile wallet market is rising faster in India than in most other areas of the world.
With rising smartphone penetration, the Indian environment is also aligning well for mobile wallet use in a way that is not being experienced in other areas of the globe. For one thing, there is an increase in disposable incomes. More people have money to spend on areas outside of vital essentials.
With all these factors combined with the country’s efforts to reduce the use of cash, people are turning to their phones to pay for products and services. This is, after all, a country that is greatly unbanked and in which it is not necessarily commonplace to have credit cards. Therefore, when cash is not an option, people are turning to the option they already have in their hands: mobile phones.
This has created a nearly ideal opportunity for mobile wallet market growth and it appears as though this will continue for at least another five years.
The two companies have decided to work together to make it easier for consumers to use smartphones in-store.
PayPal Holdings Inc. has entered into a new mobile payment partnership with Citigroup Inc. The goal is to let customers easily use smartphones to pay for products and services at a checkout counter.
The agreement between the two companies will not impact PayPal’s main e-commerce business.
The PayPal online payments and peer-to-peer transactions will not be connected with the new mobile payment partnership. Instead, it will open up a new direction for the company to be able to participate in smartphone transactions. It offers the ability to carry out transactions with in-store purchases.
This new agreement has raised certain questions about PayPal’s growth strategy. Some have questioned whether or not it has the potential to bring this business to a size that would rise above the lost fees.
PayPal’s CEO assures critics that the mobile payment partnership has taken this into account.
PayPal is offering deals to credit card issuers in order to provide incentives for using their new in-store mobile payments, said CEO Daniel Schulman. The company’s head of global core payments, Jim Magats, said “We talked about giving customers flexibility to pay how they want, and now we are rolling out new experiences.”
Citigroup and Fidelity National Information Services (FIS) will begin allowing customers to lead their credit cards into PayPal accounts. This will make it possible for point-of-sale mobile swipe technology. As Citigroup currently boasts 143 million customer accounts, this presents a considerable opportunity.
The idea is to “enable banking in the palm of our customers’ hands,” said Ralph Andretta, Citigroup card exec.
PayPal is also working with two smaller banks as a part of this mobile payment partnership through FIS. They include Wintrust Financial Corp. and Avidia Bank. This agreement is only the latest in a growing race among banks and credit card issuers to take hold of the mobile wallet market that has yet to move into mainstream use in the United States. Other massive participants include J.P. Morgan Chase & Co. as well as tech giants such as Google, Samsung and Apple.
