Bank wallets growing faster than e-wallets

CHENNAI: In the bank versus e-wallets sweepstakes, the banks have now gained lost ground. As of February, the number of transactions put across through e-wallets have dropped 10% month on month in February while banks have gained 20% in the same period, over a larger base.
Reserve Bank of India data also shows that the 8 e-wallets, including Paytm, Mobikwik, Freecharge, saw a loss in their marketshare post November 8.
E-wallets, which had a market share of 34% of total PPI transactions (169.32 million) in December, saw a dip to 33% in January and then a sharp fall to 29% in February.
RBI data also showed that e-wallets saw maximum growth of 50% to 88 million transactions in the month of December, and then fell 1% in January, before falling another 10% in February to 78 million.
Bank wallets, pre-paid cards and vouchers however saw a growth of 57% in December to 173 million and post-demonetisation saw growth of 20% to 208.45 million in January.
So why are banks gaining an edge? "Banks have a captive customer base - they offer multiple products and payments is one among a vast number of offerings. E-wallets are transactional where float and transaction fee are their only revenue model, so there could be some structural changes in that ecosystem going forward. The players cannot continue to offer discounts, freebies and burn VC money for long without path to profitability. At some point they will feel the pressure from investors. Free lunches won't last forever," says Deepak Sharma, Chief Digital Officer, Kotak Mahindra Bank.
When RBI increased the cap on e-wallets from Rs 10,000 to Rs 20,000 in November, the expectation was that value of transactions for e-wallets would increase. It also saw e-wallets offering discounts to bring new customers under its fold.

Trending News

Nusli skips Tata Steel EGM, result awaited

Ratan Tata saving British Steel at the cost of Tata Steel India: Nusli

Blackberry Partners with Optiemus

OPEC and non-OPEC producers achieve 86 per cent conformity to output cut

Reliance eyes defense.

RIL stock maximizes 5%, market valuation ranks top Rs 4 lakh crore

How Fintech and Payments Innovations Will Disrupt Global Ecommerce

The New Nokia 3310 Gets A Camera, Expandable Storage, And A Design Makeover

Everyone Can Adopt This Founder's One-Step Productivity Advice

Reliance Jio plans to overtake Airtel, hit 50% revenue market share in 4 years

Samsung unveils Nougat for S6, and S6 Edge

Sensex up 146 Points on exit polls forecast

What the CIA WikiLeaks dump tells us: Encryption works

Idea Cellular to offer free incoming calls on domestic roaming

BJP at Centre and in states will spur growth reforms: India Inc

Forex reserves up $1.218 billion to $364 billion

Following emergent win in UP, Centre May take may take tough reform decisions.

The Top Five Challenges Of Doing Business In Dubai

My 8 Favorite Tools for Driving Business Growth

Nike's hijab line for Muslim female athletes, and Sydney boys on the importance of feminism

Uber wins driver-status case in France on legal technicality

Adani Hopes to Start Australian Coal Mine Project in August

Tesla’s $1 Billion Cash Raise May Fall Short

Race to Build Offshore Wind Farms That Float on Sea Gathers Pace

7 Things Every Entrepreneur Should Do Before 7 a.m.

Can Main Street Businesses Thrive in the Trump Era?

Russia, Saudis Move at a Different Pace as Oil Cuts Scrutinized

China Southern Said in Talks to Sell Stake to American Air