Indian mobile wallet market is expected grow from USD 53.5 billion in 2017 to USD 1 trillion in 2021 registering a CAGR of 108.4%. The transactions through mobile wallet are expected to grow from just more than 7.4 billion in FY2017 to 143 billion by FY2021 at a CAGR of 109%. All these developments have been attributed to certain factors such as growth in smartphone usage, mobile internet penetration, e-commerce segment, and increase in individual disposable income. In addition, there has been a strong push from central government towards adoption of digital payments. All these factors have led to increasing popularity of mobile wallets. Consequently, there is an increased interest from foreign players and US based fintech investment company MoneyOnMobile is the latest entrant.
MoneyOnMobile based out of Dallas, is planning to invest approximately USD 100 million in prepaid mobile wallet and remittance service provider Mobile Payments Limited (MMPL). The company launched mobile ATMs across the country in mom and pop stores in November 2016. It had also bagged USD 1.5 million in unsecured credit from YES Bank. It currently acts as banking correspondent from YES Bank and Ratnakar Bank as well. It has 190 million unique customers with transaction volume of USD 1.7 billion as of 2016. MoneyOnMobile officially entered Indian market back in 2012 with MMPL and has invested around USD 30 million in the company until now. The company has stated that it will continue to invest significantly in MMPL in coming 2 to 3 years for extending its business operations.
India is cash intensive market with 80% transactions still carried out in cash. All these figures along with a large unbanked population provide favorable grounds for business expansion for MoneyOnMobile and MMPL. Additionally, the wallet comes in with two advantages. Firstly, it does not require to be linked to any bank account and can be topped up using cash at any MoneyOnMobile supported retail store. Secondly, it also works on feature phones. MoneyOnMobile is currently present across 600 cities in India with greater density in Eastern and North-Eastern States. Its network is extended across more than 330,255 retail outlets and supported in 12 regional languages.
MMPL plans to venture out into higher margin transactions such as domestic remittance, cash-out and card purchases where commission rate is higher. This along with favorable market conditions and regulatory framework is expected to boost company’s revenue generation and strengthen its foothold in the Indian market.
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