mobile wallets - brief info overview

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Mobile Wallets- Overview

Sector: Payments (BFSI)

Aug 2015

Transaction Data

www.indiabusinessreports.com Mobile Wallets – Info Overview

Wallets are the fastest growing form of payments

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System2014-15 2014-15 2014-15 2013-14 2013-14 2013-14 2012-13 2012-13 2012-13

Volume (Million)

Value (₹ Billion)

Rs Per transaction

Volume (Million)

Value (₹ Billion)

Rs Per transaction

Volume (Million)

Value (₹ Billion)

Rs Per transaction

3 Paper Clearing 1,196.5 85,434 71,403 1,257.3 93,316 74,219 1,313.5 99,982 76,120

4 Retail Electronic Clearing 1,687.4 65,366 38,736 1,108.3 47,856 43,179 694.1 31,881 45,934

5 Cards 8,424.0 25,415 3,017 7,219.1 22,160 3,070 6,398.4 18,637 2,913

5.1 Credit Cards 619.4 1,923 3,104 512.0 1,557 3,040 399.1 1,244 3,117

5.2 Debit Cards 7,804.6 23,493 3,010 6,707.1 20,603 3,072 5,999.2 17,393 2,899

6 Prepaid Payment Instruments (PPIs) 314.5 213 679 133.6 81 607 66.9 79 1,183

6.1 m-Wallet 255.0 82 321 107.5 29 270 32.7 10 306

7 Mobile Banking 171.9 1,035 6,022 94.7 224 2,367 53.3 60 1,124

11 Grand Total (1.1+1.2+2+3+4+5+6) 12,049.3 1,77,545.5 14,735 9,920.6 1,63,666.2 16,498 8,558.8 1,50,649.9 17,602

Y-o-Y Change3 Paper Clearing -4.8% -8.4% -3.8% -4.3% -6.7% -2.5%

4 Retail Electronic Clearing 52.3% 36.6% -10.3% 59.7% 50.1% -6.0%

5 Cards 16.7% 14.7% -1.7% 12.8% 18.9% 5.4%

5.1 Credit Cards 21.0% 23.5% 2.1% 28.3% 25.1% -2.4%

5.2 Debit Cards 16.4% 14.0% -2.0% 11.8% 18.5% 6.0%

6 Prepaid Payment Instruments (PPIs) 135.3% 163.3% 11.9% 99.6% 2.3% -48.7%

6.1 m-Wallet 137.2% 181.7% 18.8% 228.8% 190.2% -11.7%

7 Mobile Banking 81.5% 361.8% 154.4% 77.7% 274.3% 110.6%

11 Grand Total (1.1+1.2+2+3+4+5+6) 21.5% 8.5% -10.7% 15.9% 8.6% -6.3%

Customers rapidly going electronic


(Largely retail payments)2014-15 2014-15 2013-14 2013-14 2012-13 2012-13

(Institutional like RTGS not counted here)

Volume (Million)

Value (₹ Billion)

Volume (Million)

Value (₹ Billion)

Volume (Million)

Value (₹ Billion)

3 Paper Clearing 9.93% 48.12% 12.67% 57.02% 15.35% 66.37%

4 Retail Electronic Clearing 14.00% 36.82% 11.17% 29.24% 8.11% 21.16%

5 Cards 69.91% 14.31% 72.77% 13.54% 74.76% 12.37%

5.1 Credit Cards 5.14% 1.08% 5.16% 0.95% 4.66% 0.83%

5.2 Debit Cards 64.77% 13.23% 67.61% 12.59% 70.09% 11.55%

6 Prepaid Payment Instruments (PPIs) 2.61% 0.12% 1.35% 0.05% 0.78% 0.05%

6.1 m-Wallet 2.12% 0.05% 1.08% 0.02% 0.38% 0.01%

7 Mobile Banking 1.43% 0.58% 0.95% 0.14% 0.62% 0.04%

11 Grand Total (1.1+1.2+2+3+4+5+6) 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

Share of paper or cheque based clearing is falling rapidly, down from 66% of total in FY13 to 48% in FY15, or a 18% reductionin share of total in just 2 years

Electronic clearing the biggest gainer, share has gone to almost 37%, up by 16% as a share of total. ECS has captured most ofthe shift from cheque based.

Cards have captured most of the rest, gaining just under 2% of share of total in the 2 year period.

Regulation


4 types of wallets allowed by RBI


Source: RBI

Closed

Generally issued by business establishments for

use at their respective establishment only

Cash Withdrawal – NO

Redemption – NO

Semi Closed

Redeemable at a group of clearly identified merchant

locations


Redemption – NO

Semi Open

Can be used for purchase of goods and services at any card accepting merchant

locations


Redemption – NO

Open

Can be used for purchase of goods and services at any card accepting merchant

locations

Cash Withdrawal – YES

Redemption – YES

Who can issue?


Who can issue

Only banks which have been permitted to provide Mobile Banking Transactions by the Reserve Bank of India shall be permitted to launch mobile based prepaid payment instruments (mobile wallets & mobile accounts).

Other entities would be permitted to issue only closed system prepaid payment instruments and semi-closed system prepaid payment instruments

Eligibility

Only banks and Non-Bank Finance Companies complying with the Capital Adequacy requirement prescribed by Reserve Bank of India from time-to-time shall be permitted to issue prepaid payment instruments.

All other entities shall have minimum net owned funds of Rs 10 lakhs

Exemption

Entities issuing closed system Prepaid payment instruments are exempted from the purview of the guidelines and need not seek authorization from Reserve Bank of India, for issuance of such payment instruments subject to the following:

i. A closed system payment instrument shall have a maximum value of Rs 5000/- only.

ii. These instruments cannot be used for purchase of another prepaid payment instrument.

iii. Amounts collected under the scheme shall be exempt from the provisions of paragraph 7 below, provided the value of outstanding instruments does not exceed Rs 50 lakhs or 10% of the issuers' 'net owned funds', whichever is lower.

iv. Entities issuing such instruments shall inform Reserve Bank of India when they start operating such schemes.

v. half yearly audited statement shall be submitted to the Reserve Bank by such entities indicating the total value of instruments issued during the period and the value outstanding as at the end of the period. It shall be accompanied by a certificate from the Statutory Auditors stating that the company complies with the provisions of paragraph (iii) above.

Companies


Close to 40 companies have registered with RBI to issue mobile wallets


Company Instrument1 Aircel Smart Money Limited Prepaid Payment Instruments

2 Airtel M Commerce Services Ltd. Pre-paid payment instruments known as Stored Value Card Wallet (SCW) ‘Airtel Money’

3 Atom Technologies Limited Pre-paid payment instruments known as ‘Atom Wallet’ and ‘Aquapay’

4 Card Pro Solutions Pvt. Ltd. Prepaid Payment Instruments

5 Citrus Payment Solutions Pvt. Ltd. Pre-paid payment instruments known as ‘Citrus Cash’

6 DigitSecure India Private Limited Pre-paid payment instruments e-wallet known as ‘HotRemit'

7 Eko India Financial Services Private Limited Pre-paid payment instruments

8 Fino Paytech Ltd Pre-paid payment instruments

9 FX Mart Pvt. Ltd. Pre-paid payment instruments known as

10 GI Technology Private Limited Pre-paid payment instruments Card known as 'I Cash'

11 Idea Mobile Commerce Services Ltd. Pre-paid payment instruments known as ‘Idea Money’

12 India Transact Services Limited, Pre-paid payment instruments known as ‘Ongo’

13 Itz Cash Card Ltd. Pre-paid payment instruments known as ‘Pay on web’, ‘Mobile Wallet’ and ‘Itz Cash BSNL trust Card’

14 Kedia Infotech Ltd. Pre-paid payment instruments known as ‘Etran Wallet’

15 MMP Mobi Wallet Payment Systems Limited Pre-paid payment instruments known as ‘mRupee’

16 Mpurse Services Pvt. Ltd. Pre-paid payment instruments known as ‘mpurse wallet’

17 Muthoot Vehicle & Asset Finance Ltd. Pre-paid payment instruments e-wallet known as ‘Muthoot Money’ and m-wallet known as ‘Muthoot wallet’

18 My Mobile Payments Limited Pre-paid payment instruments known as ‘MOM’

19 One Mobikwik Systems Private Limited Prepaid Payment Instruments known as ‘Mobikwik Wallet’

..Close to 40 companies have registered with RBI to issue mobile wallets


Company Instrument20 One97 Communications Ltd. Mobile based Pre-paid payment instruments m- Wallet known as ‘Paytm wallet’

21 Oxigen Services (India) Pvt. Ltd. Pre-paid payment instruments known as ‘Oxigen Wallets’

22 Paul Fincap Pvt. Ltd. Prepaid Payment Instruments

23 Pay Point India Network Private Limited Pre-paid payment instruments known as 'Pay Pointz'

24 PayMate India Pvt. Limited Pre-paid payment instruments known as ‘Paymate Wallet’

25 Premium eBusiness Ventures Private Limited Pre-paid payment instruments

26 Pyro Telecommunications Ltd. Pre-paid payment instruments m-wallet known as ‘SpeedPay’

27 QwikCilver Solutions Pvt. Ltd. Pre-paid payment instruments, Co-branded gift card known as ‘Issued by QwikCilver’

28 Reliance Payment Solution Limited Pre-paid payment instruments known as ‘Jio Money’

29 Smart Payment Solutions Pvt. Ltd. Pre-paid payment instruments known as ‘PayCash’

30 Spice Digital Ltd Pre-paid payment instruments

31 Tech Mahindra Limited Pre-paid payment instruments (m-wallet) known as ‘MoboMoney’

32 Transaction Analysts (India) Private Ltd. Pre-paid payment instruments known as ‘Transaction Assured’

33 UAE Exchange & Financial Services Ltd. Pre-paid payment instruments m-wallet known as ‘X-Pay

34 UTI Infrastructure Technology and Services Ltd.

Pre-paid payment instruments known as National Common Mobility Card (NCMC)

35 Vodafone m-pesa Limited Pre-paid payment instruments known as ‘Vodafone M-pesa’

36 Y-Cash Software Solutions Private Limited Pre-paid payment instruments m-wallet known as ‘Y-Pay Cash’

37 ZipCash Card Services Pvt. Ltd. Pre-paid payment instruments known as 'ZipCash Coupons'

Top Mobile Wallets in India


PayTM

Launched in 2014

Owned by One97 Communications

Claims to have crossed 100mn users in Aug’15, a year ahead of target

Claims wallet accepted by 80,000 merchants

Well funded, has raised $600mn plus. Expects to break even in 2018

MobiKwik

Launched in 2009

Claimed 17mn users as on May’15

Wallet accepted in 50,000 outlets

Has raised $30m so far, looking to raise another $200m to counter PayTM’s horde

Oxigen

A mobile recharge company which branched into wallets

Claims 6 millions users

Can be used as a mode of payment on more than 2000 websites

Top Mobile Wallets in India


Citrus Pay

Claims 15 million registered users, of which about 3 million are active users

Over 5000 retailers, wants to take this to 25,000 in 2 years

Claims a GMV run rate of $2bn, targeting $bn by FY16 end. Though this is mostly non-wallet business figures

Has raised about $7.5mn so far. Invested in by investors such as Sequoia Capital, Beenos, and E-Context Asia

PayU Money

Owned by Naspers Group, a South African entity

Claims 5.5 million customers

Claims acceptance at over 80,000 websites and merchants

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Mobile Wallets – Info Overview

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