Mobile wallet transactions in India is forecast to reach Rs. 1 trillion mark by 2018 and Rs. 800 billion in 2017, a growth of 113% on the previous year, according to GlobalData.
The Indian government is heavily promoting the use of electronic payment and has introduced a slew of regulatory guidelines for mobile wallet providers in order to safeguard consumer interests, as well as curb money laundering activities. The mobile wallet transaction value in India is expected each Rs. 2.8 trillion by 2021.
Ravi Sharma, Senior Analyst, GlobalData’s Payments practice commented, “Complying with the new guidelines for the Indian wallet market, brought in by the Reserve Bank of India in October this year, could be a challenging task for small players operating in the industry.’’
Small players with a limited funding are likely to either exit the market or be acquired by larger companies, resulting in the further consolidation of the nascent Indian digital wallet marketplace.
The new guidelines also form part of the government’s broader anti-money laundering regulatory programme aimed at curtailing any laundering or suspicious transactions carried out through these electronic payment methods.
In addition to KYC norms, the RBI also mandated wallet providers to track and maintain a log of all the transactions undertaken using these wallets for at least ten years, and report any suspicious transactions to the Financial Intelligence Unit (FIU).
The RBI’s decision to allow interoperability in the mobile wallet industry means that users using wallets will be able to transfer funds seamlessly between wallets of different companies and banks, via the Unified Payments Interface (UPI). Mobile wallet providers are required to make all KYC-compliant wallets interoperable amongst themselves within the next six months.