India, with the second largest consumer base worldwide based on population, offers companies massive potential for electronic payments in the future. At the moment, however, firms are trying to overcome several barriers to boost electronic payments, argues an article from ZDNet.
While only 35 percent of the population has a formal bank account, mobile phone penetration is much deeper, according to the World Bank. India has 72 mobile-phone subscribers per 100 residents, the bank says. India’s population is over 1 billion.
As a result, companies hoped mobile wallets and payments in India. Mobile payments in India appears to have a promising future following the addition of M-Pesa to the market, but the overall use case for the payment form faces a bleak future.
The author of the ZDNet article argues one of the primary reasons a lack of consumer adoption is that Indian consumers remain tied to cash. Furthermore, Indian telecom operators are reluctant to do business with Apple or Google as they are afraid that these firms will pry away market share, the article says. Even Starbucks, which has had great success in the United States with its mobile wallet, does not provide the service in India, making it hard to actually use a mobile wallet if you have one, the article goes on.
It’s not surprising mobile wallets in India are failing based on the aforementioned reasons. On the other hand, the huge number of unbanked consumers will likely make solutions such as M-Pesa, which doesn’t rely on established financial institutions and involve the use of cash, very successful in the long run.
