NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Wednesday, January 13, 2016

“Buy this through XYZ digital wallet and get Rs. 50 (US$0.75) cashback on every ticket booked,” read a recent email I received from PVR Cinema.

I usually receive this a few times a week and it keeps me informed about the latest movies. The bottom of the emails, as seen, are peppered with advertisements for mobile wallets. All of them vying for your attention and begging to pay part of the ticket price on your behalf. All I have to do is make the transaction through them.

Just like this email I received, the mobile wallet space has seen the density of brands in the market soar. We now have a never ending list of applications offering consumers discounts, cash-backs, vouchers and coupon codes.

Digital wallets or mobile wallets started with mobile recharges, but have now moved up the value chain to provide a whole host of other services like shopping, paying for food and cabs and even booking a new home.

Currently, the RBI regulation stipulates a fund transfer limit of Rs. 10,000 (US$149) for a non-verified user and Rs. 100,000 (US$1,494) for a verified user. Payments Bank licenses are only granted if the companies meet certain conditions stipulated by RBI such as a minimum paid up capital of Rs. 100 Crores (US$14,948,800).

In all, 11 mobile payment licenses were granted in August 2015. We now have unlimited options when it comes to who to choose and why. Let’s talk about a few of them.