E-wallets : Rising but not for all !
The emergence of a new age concept of e-wallets felt it got its biggest favour by demonetization as their awareness. User base and transaction volumes jumped to unexpected heights. The e-wallets companies cashed in on the opportunity and spread across the country. Feeling they have a very promising future which is not turning true.
Demonetization turned out to be a menace for non-banking e-wallets.
E-wallet companies like Paytm and MobiKwik that were riding high since the government enforced demonetisation last year. Have seen a decline in their transaction volumes in the last half year. Going cashless resulted in increase in competition to e-wallets as banks started coming up with their own digital payment apps. SBI has SBI Buddy, hdfc has payZapp and many others, almost every big commercial bank has its own. This made money transferring very easy for a user as his money does not need to be in any other account. Banks are a more trusted source so why go for a third source .
Other problems still continue to hamper e-wallets.
RBI’s regulations have many restrictions on e-wallet transactions relating to wallet-to-bank account transactions. Example a paytm user can transfer a maximum of Rs. 25000/- per month to its bank account but not more than Rs. 5000/- per day. This only fetches them small players like a tea stall business or a food stall making them loose out on major high value transactions.
IMPS an intra-bank money transferring solution has been more utilized post demonetization. As one can directly transfer money from one bank account to any other bank account with hardly any charges.
Rural population is still not tapped. Network has been an issue, plus lack of knowledge of how to use such apps. And the mindset of not having trust on non banking e-wallets has resulted in their downfall.
Major players like amazon(amazon pay), airtel(airtel money) and many more have also entered the league, these are more trusted brands and already have a very large user base.
Paytm still looks promising as its making good progress like roping in IRCTC or the inclusion of BHIM UPI. It has recently invested in Creditmate a lending start-up and is constantly updating. But others need to really start looking for diversifying their focus on other financial services in order to stay afloat. Lets see what future has in store for them.
