When asked who is sitting at the forefront of financial innovation, very few are likely to immediately think of India. However, where eWallets are concerned, India’s adoption and usage of these mobile methods of storing currency is certainly work taking note of. Until fairly recently, India’s monetary transactions were pretty much entirely done by cash and that included 85% of wages to workers. However, recent years have seen an improvement for India, with more and more mobile wallets and technologically advanced methods of payment coming into play due to the demonetisation sweeping across the country. Despite the cause for this change, India still sits at the forefront of the mobile wallet industry and we’re exploring a little deeper below.
What Is An eWallet?
If you ever hear the words ‘eWallet’ or ‘digital wallet’, then it’s likely that whoever is speaking is referring a digital method of storage for our money. These wallets are stored on our computers or, more commonly, on mobile devices and can be topped up with funds that are then used to buy goods and services online. eWallets often give you the opportunity to store multiple credit cards or bank account numbers in a single place, which ultimately makes payments much easier overall. Once verified, you no longer need to enter any of your bank or credit card details to make a payment. It’s convenient, secure and ultimately makes payments much more efficient online.
India’s Position At The Forefront
If there were ever a country to sit at the forefront of eWallets, India wouldn’t likely be a consideration but the simple fact of the matter is that it is. India’s adoption of mobile wallets has proven to be faster than even that of the UK, USA or China, which is quite an accomplishment for a country with very minimal FinTech infrastructure prior to the shift. Transactions with eWallets sat at INR 24bn in 2013, but over the following four years, skyrocketed to INR 955bn by 2017 which is quite the jump if we do say so ourselves. In fact, there were even predictions that it could reach an incredible 1 trillion by the end of 2018! They may have been introduced for demonetisation purposes, but eWallets in India have taken on a life of their own as a method of payment for all.
The demonetization move started in 2016 by Narendra Modi’s government was undoubtedly a huge part of the eWallet adoption. The cash-crunch saw India declare that all ₹500 and ₹1000 banknotes of the Mahatma Gandhi Series would become invalid and impossible to spend in return for new notes. This demonetization was in order to crack down on fraud and counterfeit cash that had been used for illegal purposes, but the disruption caused by this sudden announcement led consumers to ridding themselves of cash completely and opting for mobile wallets instead. The use of these eWallets skyrocketed, and has become one of the most popular methods of payment in India as a result.
What Could The World Learn?
There’s no denying that India has taken on this technology with open arms and rightly so. The need for a more secure and stable form of payment to settle the financial unrest that came as a result of demonetisation led to mobile payments becoming the chosen method, not least because the government were encouraging digital forms of payment to further protect the country’s industry from fraud and terrorism. From retail stores accepting eWallet payments as standard from as early as July 2016, to the fact that even Amazon has started up its own eWallet in India, there’s no denying that they have become popular, though whether or not demonetisation as a whole has worked is still up for debate.
For other countries, however, India’s use of mobile wallets isn’t something to be overlooked. For banks and other financial institutions looking for ways to promote digital payments on a mass scale, India’s success is a good place to start looking. While demonetisation may not necessarily be the best way to go about it, it’s certainly proven effective on that front! However, on a broader scale, we can definitely see that eWallet use could promote simpler regulation, improved security of payments by reducing the need for detail entry online and when coupled with other security measures like biometric verification (fingerprints, facial recognition etc.) these powerful countries could easily regain control over the money circulating in their countries.
Whether demonetisation has proven successful in India is still a hot topic amongst politicians and consumers alike, but there’s simply no denying that it’s promotion of digital and mobile wallets has changed the financial industry completely. What was once just a method of coping with a changing economy has become a standard method of payment across much of the country, and there’s no denying that other global leaders and financial institutions can certainly learn a thing or two about security and efficiency for their citizens and customers.