Mobile Wallets & their acceptance trend in India

Mobile Wallets & their acceptance trend in India

“An idea whose time has come” aptly summarises the growing usage trend of mobile wallets in India. A concept that was relatively new in India and whose usage was limited to just a few urban net-savvy citizens, took a giant leap in 2016 when demonetisation was announced. But that is not the sole reason for its popularity and common acceptance across all regions today. What started as an online facilitator for mobile recharge and bill payments gradually grew to become the preferred medium of payment across many categories, due to the emergence of many digital payment companies in India.


A mobile wallet is commonly referred to an electronic service that facilitates the sending and receiving of payments, electronically without the need for a third party authentication. One can store funds in this electronic service, (thus the name wallet) and use them as and when required. Funds can be transferred and received from either individuals or business establishments to complete the sale of a product or service from either end, with the sent funds being available almost immediately. Moreover, the funds received can be transferred to traditional banking channels for withdrawal at one’s convenience.


The mobile wallet companies in India had to make extensive efforts to increase the acceptance of mobile wallets across a wide range of merchants ranging from clothing stores to restaurants, vegetable stores, and even street-side stalls. The gradual acceptance of mobile wallets by all these establishments led to people using it as an alternative and convenient mode of payment, as compared to cash and debit/credit cards. Apart from this, there are quite a few factors responsible for the growing acceptance of mobile wallets in India, such as;


Usage of smartphones

The multi-functionality of smartphones has made them very popular as a means of communication, entertainment, and information, due to which their sales have grown exponentially in India. This led to a growth in the number of people using mobile wallets, as they can be downloaded on the phone with relative simplicity and ease, for their usage as and when required. Moreover, smartphones are something that people tend to carry with them all the time, making it convenient to use them at points of purchase and retail stores.


Improved Internet Access

With internet data usage charges being among the lowest in the world, people tend to use the data services for all their needs be it looking up the latest news, checking the latest recipes and keeping track of the latest sports. This increasing dependence on the internet has also led to it being used for making online payments, leading to a growth in the usage of mobile wallets.


Ease of commerce & payments with security features.

The wide acceptance of mobile wallets and increasing avenues where it can be used, has led to its growth across India. Today it can be used for a wide range of payments which include but are not limited to ordering food, buying bus, train or air tickets, making mobile payments and recharges, DTH and even filling petrol at fuel stations.

People also find mobile wallets convenient to send funds across to their friends and relatives, which can be accessed by them almost immediately after transfer in case of an emergency. Mobile wallets also offer better security versus cash and other traditional methods such as cards and net banking due to them being operated from the user’s mobile device, through a secure network.



In 2016, the government of India announced the demonetisation of Indian currency notes of

Rs. 500/- & Rs. 1000/-. This led to a prolonged cash shortage in the country as currencies of smaller denominations were limited and not held in adequate numbers by the Indian people. This led to a dependence on mobile wallets for making all purchases be it big or small to meet one’s daily and social needs.

The mobile wallet companies were quick to capture on this opportunity and started an extensive drive to enlist all types of merchants, to accept payments, through mobile wallets. Merchants who were facing declining sales and irate customers who were unable to purchase even the bare necessities readily agreed to come on board and start accepting mobile payments. Demonetisation was the largest influencing factor for the growth of mobile wallets both at the merchant and consumer level and for helping transform India from a paper currency based economy to a digital currency based economy.


Mobile wallets are the new convenient and modern way of both making and receiving payments for individuals and merchants. They are the facilitators of the digital economy and will soon be the most widely accepted payment method both at the rural and urban level in India.