M-wallets surge in small towns in nation-wide cash-crunch
Paytm, India’s largest digital payments firm, experienced a never-before surge as the wallet’s daily transactions crossed five million, putting the company on the path to do over Rs 24,000 crore of transactions in the current financial year, as the company got 30% of its transactions from beyond tier-II towns.business Updated: Nov 14, 2016 11:07 IST
As India outlawed its two biggest banknotes, mobile wallets are witnessing a spurt in enquiries and usage in small towns, as unavailability of currency hit wide across the country.
Paytm, India’s largest digital payments firm, experienced a never-before surge as the wallet’s daily transactions crossed five million, putting the company on the path to do over Rs 24,000 crore of transactions in the current financial year, as the company got 30% of its transactions from beyond tier-II towns.
This might be the biggest change in India’s digital economy drive as users in small towns – usually dependent on cash – started using the mobile wallet for the very first time.
That’s important as most of the internet users in the cities and bigger towns are already taken and leaving the next frontier of growth to smaller towns and villages – as also stated by global internet companies such as Google and Facebook.
“We have opened offices in 70 odd towns, because we were getting a lot of requests,” said Kiran Vasireddy, senior vice-president, Paytm, which showed stark growth in the past couple of days.
Traffic grew 700%, money added to wallet grew 1000%, transaction value grew by 200%, and app downloads went up by 300%.
Vasireddy said that small towns have the lack of credit and debit card infrastructure, “so merchants want a channel like ours as there are not point-of-sale machines to take plastic money.”
Paytm has engaged 10,000 people to sign up merchants, and plans to have its presence of 500 towns by March. It already is present in 300 of them.
Paytm’s rival wallet company Mobikwik, too, is engaging fleet-on-ground to sign up merchants. “The real acceptance won’t happen as mobile money is accepted in by small mom-and-pop shops, in the smallest towns… that’s a huge opportunity,” said Bipin Preet Singh, founder and CEO of the company.
Singh is betting on expansion as Prime Minister Narendra Modi said that removing the notes is not the last step in demonetisation. Singh wished that banks play a role in building the reach for digital money, but doesn’t have much hope. “I don’t think banks will be able to do it,” Singh said.
As large number of Mobikwik users move beyond recharging to use the wallet for “real transactions”, Singh said that he will hire agencies to increase the wallet’s footprint, like FMCG companies do.
Mobikwik is already seeing a vast number of downloads and transactions from small towns, as transactions grew 18 times, 2000% more money was added in the wallet, and app downloads went up by 40%.