India, with its ever-expanding digital landscape, has witnessed a significant surge in the adoption of digital wallets in recent years. This revolution in financial technology has transformed the way people transact, offering convenience, security, and efficiency like never before.
Also known as a mobile wallet or an e-wallet, it is a virtual platform that is a software-based application where users can add, store and transact money digitally whenever there is a payment required. E-wallets have undergone a remarkable evolution from their inception as tools primarily for online transaction to becoming integral components of everyday life for millions of Indians.
The adoption of digital wallets in India has been driven by several key factors. According to a report, the value of digital payments transaction in India is projected to reach $1.3 trillion by 2025. The government’s push for digital payments through initiatives, Digital India and Unified Payments Interface (UPI) has played a crucial role in encouraging consumers to adopt cashless alternatives. Many private applications are providing the UPI service Like Paytm, Amazon pay, Gpay, PhonePe, PayPal. Here are some of the factors driving the rapid adoption of E-wallets across India:
Accessibility:
According to a survey, 86% of Indian consumers cited convenience as the primary reason for using above digital wallets. With just a few taps on their smart phones, users can complete transaction seamlessly, eliminating the need to carry physical cash or cards. Also, digital wallets are accessible 24/7, and allowing users to make payments or transfers anytime, anywhere, thereby enhancing their overall banking experience.
Security & Fraud Prevention:
Security concerns have historically been a barrier to digital transaction in India. Digital wallets employ advanced encryption technologies and multi-factor authentication method to ensure the security of user’s financial information. According to a report by PwC India, 68% of Indian consumers feel that digital wallets are a secure mode of payments. Additionally, many wallets offer features such as biometric authentication and transaction alerts.
But due to some security issue still in the system, around 300,000 complaints were on hold with lien amount of Rs 921.6 crore in 2023, as per the reply.
Data from the Indian Computer Emergency Response Team (CERT-IN) shows that 1,391,457 cyber security incidents were reported in 2022, however lower than 1,402,809 in 2021. There has been a rising trend in recent years.
The rising trend of digital wallets in India reflects a transformative shift towards a digital – first economy. With their unparalleled convenience, enhanced security, and innovative features, digital wallets have become an integral part of everyday life for millions of Indians.