Mobile wallet transactions on slippery slope as UPI rises
digital payment mode in the country at the cost of mobile wallets that are losing relevance with their monthly transactions in steep decline.
Around 403 million mobile wallet payments were recorded in June this year, 24% lower compared with 530 million such transactions a year earlier, data from the Reserve Bank of India show. The number has also been falling sequentially every month since January, when it was more than 576 million.
Throughout this year, these prepaid payment instruments have shown a decline in transactions with January recording more than 57 million wallet payments, compared to the next six months when it kept declining to the 40 million range.
In case of person-to-person transactions, another popular use case for wallets, the year-on-year fall has been significant too. This June the ecosystem recorded around 25 million such transactions, down 20% from 31 million in June last year and down 26% from 34 million in June 2022.
“The acceptance infrastructure for UPI became much larger than wallets and all customers with bank accounts could participate in UPI payments. Further, UPI was on a nil fee model, whereas merchants had to pay a fee of up to 1.25% on wallet payments, which incentivised the merchants to accept UPI over wallets,” said Rohan Lakhaiyar, partner, Grant Thornton Bharat.
Large fintechs like PhonePe, Google Pay, Paytm and Amazon Pay are all focused on the UPI story currently. Paytm, which had one of the largest mobile wallet operations, lost its wallet business from March 15 after
