Picking up from the negative impact of RBI’s (Reserve Bank of India) full KYC norms, digital payments through the mobile wallet companies have registered 11% growth in April, in terms of transactions.
According to the data by RBI, mobile wallet registered 279 Mn transactions in April, an 11% growth against 268 Mn transactions in March this year.
Even though this is much less than 310 Mn transactions recorded in February, before the RBI deadline, the mobile wallets are still far behind 320 Mn transactions registered in April 2017.
On October 11, 2017, the RBI had issued the Reserve Bank of India (Issuance and Operation of Prepaid Payment Instruments) Directions, 2017 (Master Directions), making KYC compliance mandatory for prepaid payments instruments (PPI) such as wallets by February 28, 2018.
At the same time, card-based transactions have also shown consistent growth. While Credit cards recorded 133 Mn transactions in April, against 128 Mn in March, debit cards clocked in 1 Bn transactions in both March and April.
It is to be noted that most of the credit card transactions were from card swipes at merchant outlets and for debit cards, 70% share of transactions comes from ATMs, according to April data.
Further, the number of PoS terminals in the country grew to 3.16 Mn against 3.13 Mn in March. Also, debit cards also jumped 5.2% to 906 Mn in April against 861 Mn in the previous month.
One of the biggest payment medium, UPI (Unified Payments Interface) continued to show steady growth clocking in 189 Mn transactions in April.
However, cards still have remained the dominant form of payment at $52.57 Mn (INR 355 Cr) for April against $19.69 Mn(INR 133 Cr) for prepaid payment instruments.
According to the RBI’s earlier data, transactions worth $2 Tn (INR 131.95 Tn) were carried out on mobile wallet in January 2018, as compared to $1.9 Tn (INR 125.51 Tn) in December 2017.
Recently, reports surfaced that RBI might release mobile wallet interoperability rules in about a month. Further, the report added that once mobile wallets enable the mandatory know your customer (KYC) requirements for their users, the RBI would just be waiting to get all the players to develop similar technical capabilities.
Google and the Boston Consulting Group estimated that the digital payments sector of India is set to reach $500 Bn by 2020, contributing 15% of India’s GDP.
Further, a report by Credit Suisse predicts that the digital payments market, which is currently worth around $200 Bn, is expected to grow five-fold to reach $1 Tn by 2023.
With multiple players like Paytm, Google Tez, PhonePe etc leading the baton of digital payments in India, the mobile wallets are expected to soon pick up the growth levels, especially with mobile wallet interoperability coming soon.