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E-wallets: The future of transactions for the Indian consumer

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India has essentially been a cash-based economy, amassing a value of physical currency estimated to be over 11 per cent of GDP, topping the graph among emerging economies. However, there is still a proportion of India’s population who cannot avail banks and has inadequate access to technology-driven financial services.
The Government of India and the Central Bank have tried their utmost, laying significant emphasis on financial inclusion and making banking and payment services accessible to all, but to little avail. In this uptight ecosystem, digital payment has injected a fresh lease of air to the flagging payment methods.
At present, mobile payments form a minute part of the overall digital payments industry in India. With contribution from phones and tablets increasing to 30 per cent by 2020, mobile payments in India are estimated to grow to Rs 115 crore in the coming years.
With advancement in features, digital wallet operators have gained widespread adoption in recent times, building a considerable consumer base. Driven by aspirational needs of consumers, growing consumption expenditure, urbanization and digitization as an indispensible addition to our lives .The key driving factors for  digitization include a burgeoning smartphone penetration, enlargement in digital commerce, advancements in computer literacy, access to internet and broadband, and supporting regulations. Transfer of money, services related to banking transactions, value-added services such as shopping, ticketing, recharging, and bill payments are few of the aspects which are encompassed by digital wallets.
Digital payments have been a tour-de-force in changing the market ecosystem, rapidly. Especially in terms of retail, digital payments and e-wallets have shaped the consumption behaviours to such an extent that keeping cash in physical form has transformed to redundancy. With the inclusion on cash back guarantee and loyalty points, retailers are promoting the use of e-wallets for both online and offline verticals to ensure a smoother, more systemized transaction process.
The ease in transferring money from the consumer’s online wallet to the retailer’s account makes it a viable mode for money-based transaction. This decreases the hassles involved in queuing and providing smaller denominations of cash hence, improving customer service to a greater extent.  This in-turn bolsters revenue scale while providing brand value due to accessibility.
With the current move of demonetization, the environment for going digital has fertilized to a new level, opening up doors to reach the micro level. Today, even small scale stores and vegetable and fruit vendors are urging their customers to make payments through e-wallets. With lack of options to facilitate purchase in this drastic move, more citizens have opted for such platforms, boosting the download of such wallet-based apps to 30 per cent more. Yet, there are more grounds for these digital wallets to cover.
At present, there are a few loopholes in terms of proper functioning of these e-wallets. Often subjected to phishing and other cyber-crimes, wallet operators need to strengthen their security measures. This would help gain credibility, even amongst those who are skeptical of its benefits.
Also, promotion of digital literacy to the grass-root level should be taken up in a swift manner. Generating awareness among customers and aid accessibility with the new platforms will be pivotal to the widespread uptake of mobile payments in the country.
The triumph of mobile payments depends on a synergized effort from the providers, retailers, inclusive of supporting regulatory environment and channelized efforts of the industry players toward a common objective i.e. complete digitization of India.

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