New Delhi: Transactions through mobile wallets grew at 350% CAGR (compound annual growth rate) to $3.6 billion in the quarter ended 31 March, a report by consulting firm RedSeer Management Consulting Pvt. Ltd has found.
Number of transactions also increased 80% over this period.
The spurt is largely the result of Indian government’s currency exchange exercise, popularly called demonetisation, launched on 8 November last year. It scrapped Rs500 and Rs1,000 notes and replaced them with new Rs500 and Rs2,000 notes, in a bid to draw “black money" into the system.
Paytm, owned by Alibaba-backed One97 Communications Ltd, PayU Money and MobiKwik were among a dozen digital wallets that became providential beneficiary of the move. Most banks also operate their own wallets, such as HDFC Chillr, ICICI Pockets and State Bank Buddy
Post-demonetisation, however, as liquidity returned to the systems (with ATMs and banks receiving new currency notes), the average value of the each transaction dropped quarter on quarter, the RedSeer showed.
One transaction, on an average, was for $4.4 (about Rs286) in the quarter under review, down from $7.2 in the March quarter last year and its peak of $7.6 between April and June, according to RedSeer.
This is identical to the trend seen in the larger digital payments ecosystem which includes debit and credit cards, internet banking (through real time gross settlement and national electronic funds transfer), prepaid payment instruments like mobile wallets and UPI (universal payments interface).
In April, total value of digital transactions declined 26.8% to Rs109.58 trillion, while the number of transactions fell 5.6% to 843.5 million, over March, according to provisional data from the Reserve Bank of India.