Prepaid wallets keep women’s savings safe

This article is authored by Pallavi Madhok, advisory services, South Asia, Women’s World Banking, and Dilip Modi, founder and CEO, Spice Money.

The Unified Payments Interface (UPI) has revolutionised financial inclusion by providing an accessible, affordable, and simple platform for digital payments, overcoming traditional banking barriers, especially for underserved populations. It also helps vulnerable populations - such as low-income women or women from rural or peri-urban areas - build a transaction history, thus bringing them onto the wide spectrum of digital financial services.

Women empowerment (Voices of Youth)

In India, the adoption of women's mobile internet is rising (The Mobile Gender Gap Report 2023, GSMA). Coupled with the uptake in mobile services, UPI can be a key enabler of women's financial inclusion, empowering millions economically and socially. Of the 536 million women in the age group of 15 years and older, 37% report using mobile internet (GSMA, 2024), making the addressable women's market for internet-based UPI solutions 200 million strong.

However, this market is not homogenous and has a unique set of barriers and motivators for using UPI. A cohort in this market segment is typical of women who are homemakers or informal workers (such as tuition teachers or tiffin delivery services) with bank accounts and smart phones, and who manage financial transactions, but do not feel confident using digital payment applications. Their fear is that UPI exposes their personal accounts and savings to the larger financial ecosystem, which is hard to control and prone to fraudsters.

They have little to no faith in their digital abilities and feel like they need assistance in onboarding and initial usage. They feel digital money is fungible and fluid. They are afraid of hidden fees and privacy concerns. Additionally, social dynamics—like male-dominated control over finances in many households—further fuel this caution.

These concerns are exacerbated by stories of fraud within their communities and experiences of unauthorised charges or account freezes, which create lasting distrust. Financial Services Providers (FSP) may tend to overlook such psychological impact of digital finance on women users.

Prepaid payment instruments (PPIs) emerge as a key solution to bridge these psychological and structural barriers. Unlike direct bank account transactions, PPIs allow for a limited, controlled balance, creating a 'safe space' for women’s money. Products like assisted smart UPI—a wallet-based solution that allows women to preload funds, enabling a smooth transition from cash to digital payments—are designed to mitigate concerns about overexposure and monetary loss. By facilitating transactions through a nearby FSP where the agent is known and trusted by merchant women, this approach enhances their confidence and trust in digital payments. With PPIs, women can spend tiny amounts through UPI without directly accessing their primary bank accounts, minimising perceived financial risks.

With funds separate from main bank accounts, PPIs reduce the fear of complete monetary loss from potential fraud. Women customers can control how much they have loaded onto their wallets and can spend within their comfort limits. We also observed that PPIs allow women to handle their finances discreetly, providing more autonomy over spending without external interference.

In a pilot for the UPI For Her project, we introduced PPI to women for safe digital payments, onboarded them in person through a local women's agent network, and supported them in the first three transactions. This built trust and gave the customers a promise of safety in starting their digital financial journey. In our survey, 90% of the women said they intended to use the app once weekly, and 63% of the onboarded users became active users.

Once active, the adoption is swift, and women customers transact confidently. When Spice Money launched their solution Spice Pay in a new geography with enhanced features like cash load and Rupee ATM card integration, we found significant uptake despite relying solely on word-of-mouth publicity. We also observed a consistent increase in the average transaction size among wallet holders, indicating growing trust and a wider range of use cases as customers become more familiar with the wallet.

Our data further indicates that, on average, each active customer conducts 4-6 transactions per month (both deposits and withdrawals), with 40% of payments made to merchants. We anticipate this percentage will increase over time. Sixty-four per cent of the women we surveyed felt the existing payment options could be widened. Once successfully onboarded women find UPI- PPI easy and secure to use and adopt digital payments willingly.

Building trust and confidence alongside marketing the safety of the platform is imperative for first-time women users. This can be done digitally or offline by using local women's agent networks to help customers overcome initial barriers. FSPs must also develop a continuous engagement strategy after onboarding for this segment. Starting with a simple user interface for payments and slowly adding multiple use cases such as utility bills, mobile recharge, and cash-loading can strengthen the business case for FSPs through gradual revenue lines.

This article is authored by Pallavi Madhok, advisory services, South Asia, Women’s World Banking, and Dilip Modi, founder and CEO, Spice Money.