Product Adoption Life Cycle of Mobile Wallets in India


As of 20th Nov 2018, the global mobile wallet market is expected to grow at CAGR of 40% and estimated to reach at the market size of US ~$5 billion by the end of the forecast period (Source So given this, with penetration of NFC enabled Smartphones in India, are expected to drive the mobile wallet market as there are hardly any smartphone manufacturers who are not equipping the phones with NFC. It’s worth noticing the major events in India that happened on Mobile wallet market.

Digital Payments in India Link
  • On 13th May 2015, smartphone manufacturer Samsung acquired LoopPay, a mobile payment solution provider that allows users to pay via smartphone at any point of sale terminal. Samsung had to pay about $250 million as the price of competing with Apple, Google and PayPal in mobile payments. LoopPay’s technology ( a Massachusetts-based start-up) is today the foundation for Samsung Pay ( Korean phone maker). Now that’s the power of trends and an example stating that our phones will eventually replace our wallets.
  • On 1 July 2015, Digital India was launched where the Prime Minister of India had detailed presentation by National Payments Corporation of India (NPCI) on mobile payments along with other major private players. *NPCI is the one which had started and developed UPI (Unified Payments Interface).
  • On 8th Nov 2016 DEMONETIZATION of Rs.500 & Rs.1000 currency notes was announced by Indian PM, stopping it from circulation on an immediate basis.
  • On 30th Dec 2016, BHIM (Bharat Interface for Money) was launched, a digital payments platform promoted by the Indian government.

As I write this post, BHIM is betting on merchant and utility bill payments to expand its acceptance across the country. The point is not how BHIM is consistently losing market to private peers such as Paytm, Phone Pe and Google Pay. The Insight that I want to draw with the sequence of events above is the sense of purpose with which mobile wallet market making waves.


  • Smartphone manufacturers are trying to sell it as an inbuilt feature
  • Market leaders in India- PAYTM, PhonePe and Google Pay are fighting in the M-commerce space with Wallet and Non-Wallet features
  • The Government of India is looking more towards a cashless society basically to curb the rampant of corruption in India.
  • New Start-ups in M-Commence space opt for either of the 3 available Mobile Wallets types — Closed, Semi-Closed and Open based on their Business model (B2B or B2C)

Product Adoption Life Cycle for Mobile Wallets

As they say, seeing is believing. During the same timeline as mentioned in the beginning, around 2016 Dec, I had visited my home town (coastal belt of North Karnataka). I saw eagerness in the eyes of my neighbours to jump on the bandwagon of Technology and especially saw early signs of mobile wallets hitting the shores of rural India. This family I am talking about consist of 5 members.

True Story of Mobile Wallet Penetration in Rural India

Dad (52 Years), Mom( 45 Years), Son ( 25 years), Daughter (18 years) and their Grand Dad (65 years). Son gifts his Grand Dad a smartphone and teaches him the basics. Each one in the family now owns a mobile phone and hence I proudly call them SMART FAMILY. Usually, it’s the Grand Dad who takes care of paying all the Utility bills as he has the most important aspect “TIME” for his disposal. Walking on the coastal beach, son shows off how conveniently he booked a bus ticket to Bangalore meanwhile saving INR 50 /-. Son shares the same scratch card to his sister. Sister within no time learns the way to use the scratch card and buys herself an Ice cream at the Ice cream parlour near the beach. Seeing this, the mother asks Son to recharge Tata Sky before he leaves to Bangalore. Son wants his mom to use her mobile and teaches her the benefits of mobile wallets. Reluctantly mother listens but seeing the sun setting down, stating that it’s getting darker, she promises that she will do on her own later. All this while Grandfather and father are just mere spectators. Grandfather hates to stand in a queue and pay bills and learns the benefits of paying it via his phone, wishing to win a scratch card. But none act on it as Dad warns the family of frauds in mobile payments.

Cut to 2018 Dec, I visit my home town and what I see each family member is having 3 major Mobile payment apps PayTM, PhonePe and Google Pay. Seems exaggeration but the money each of the players is pumping in the form of scratch cards that today, Grand Dad is SME in utility Bill payments for close to 10 families near my area.

Profiles of Adopters

Profiling of SMART Family on PALC of Mobile Wallets

In this world where trust does not come naturally on things that you hear, seeing is believing. Hence without applying any scientific approach in comparison to 2016, today in Jan 2019, I feel Mobile Wallets are at the Early Majority stage of Production Adoption Life Cycle. Below is the Adopters profile of the SMART Rural Family I have talked about.

  • Innovators: Son in the Smart Family is for sure can be categorised under Innovators(2.5% of total user base) as day in day out since beginning is typically he has been using Mobile Wallets since its inception. He hardly carries a physical wallet and does Majority of his payments via by mobile wallets.
  • Early Adopters: Daughter in the Smart Family can be categorised under Early Adopters (13.5% of the total user base) as she closely follows her Innovator brother. She is studying and not earning but it’s just a matter of time for her to shift to Innovators category. The reason being she is one among many in Indians who are czars of window shopping, whose eyes transform into price scanner and fingers immediately roll onto their mobile, checking to see if they have any way to get the same product on discount via mobile payments.
  • Early Majority: Mom, Dad and even Grand Dad can be categorised under Early Majority (34 % of total user base) use kids as Radars and safety devices as only after great reviews and feedbacks jump on to the bandwagon of mobile wallets. Though age group in Early Majority is between 20–50 years, ours is a smart family and hence even though people might raise eyebrows.
  • Late Majority: Constitute 34% of the user base are the ones for whom the whole Discount Sale model is built as the best way to attract them and to notice is give a discount.
  • Laggards: Constitute 16 % of the user base as per me are those who are keeping the hard cash alive and also feel corruption alive. I don’t agree with the statement that its people in Rural areas as in my own building, the heart of Silicon city out of 32 families only 7 families use mobile payments. I know this exactly as the new year party bill was paid by me and except 7 of them, the rest of them have not paid me thinking it as a new year gift :)

Factors affecting the rate of mobile wallets adoption:

Young India: With 50% below the age of 25 and more than 65% below the age of 35, India is young which naturally draws them to the modern way of thinking and hassle-free living. In the product adoption life cycle for wallets, they can easily be between Innovators and Early Adopters. A recent survey says, on an average, Globally we unlock 110 times our mobiles. With restless youth for sure, in India, it might easily cross 200 times. This is indeed good news for Mobile Wallet Players.

Mobile Wallet Players in India

Smartphone and Internet Penetration: One special occasion such as festivals or birthdays or marriage, the tendency to buy a new dress or going for a party comes later. With Young Indians in my mind, the first thing to save money for the next smartphone having the best of the best features. With mobile network providers making data cheaper and with Unused Data Roll Over plans, accessing the internet has become easier. This is a huge plus point and a perfect playground for M-commerce.

Challenges affected the rate of mobile wallets adoption:

Lack of TRUST: With information overload and various service providers for mobile wallets in the market, there is indeed a serious issue of Whom to trust? All promise the same but day in day out we hear about customer data theft. Hence major challenge is to maintain confidentiality and privacy of enormous financial data

Fear to CONTINUE: With one breach of trust, call it fake news or unidentified WhatsApp message floating by, money spent by players in mobile wallet space goes into the drain as Indian consumers switch off immediately. Hence money spent more on product development rather than marketing might help retain customer base.

Traction to PLASTIC MONEY: Millennials today carry 4–5 Credit or Debit cards. Literally, they plan month to month in such a way that there was recently a session held by an engineering dropout on how he is saving and earning by mere playing with credit cards. Added to these banks have huge attractive schemes with tie-ups with multiple vendors. This is turning out to be a roadblock.

Growth and Product Adoption comparison with different Payment Modes

With a great push from the Government of India with initiatives such as Digital India, there is a shift in gear when it comes to shifting from hard cash to wallets. After demonetization, there is also a sense of fear to store heaps of cash and we can sense people moving to Digital payments. With the advent of (UPI), targeting a mobile commerce-oriented market with possible integrations with all major available platforms, UPI and mobile Wallets seem to compete together for a while. When it comes to Mobile Wallets and Plastic Cards, modern young Indian hates to carry a physical wallet with heaps of cards bulging out. So Mobile Wallets have an edge here provided they on-board more Merchants on their platform like the way Plastic cards are having it today. The snapshot below shared by Paisa bazaar gives us a glimpse of Mobile Wallets are coming up with other Payment options:

Source Paisa Bazaar

Growth Hacks Used:

Cash Back / Scratch Cards: It became the next big past time during a shopping spree. Like the famous advertisements on television, people tend to step up and pay through their mobile wallet aiming to win Cash Back / Scratch Cards. This is a great pull factor for those in Late Majority of product adoption Life cycle who seem to love discounts.

Buyer Seller Catch-up: One thing is common among all major Players in Mobile Wallet space is, that all are spending equal time to onboard both Buyer and seller on their platforms. But onboarding a seller has to pick up faster as the cost of the switch over to other mobile payments is zero. So more the merrier.

Loyal Base: One thing that we all as consumers have realised that anything done overboard the customer ceases to exist on your platform. Less is the new more and Mobile Payments seem to have realised that and hence they offer great reward points for Loyal customers ensuring that customer is not bombarded with Spams.


Mobile Wallets are here to stay!

Mobile Wallets have passed the period of the chasm and can see them pumping their chests for making it to the Early Majority phase of the Product Adoption Lifecycle. Laggards have to watch out as such is the optimism shown in this segment by the players that they will for sure feel as if they are in a LOST WORLD, where their hard cash in cupboards don’t work any longer. With Venture capitalists pumping money into major Mobile Wallet players, consumers are the winners.

References :




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Girish Vishweshwar Bhat

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