In view of Digital India, the number of digital transactions is increasing each year at a very significant rate. Our Nation embrace the culture of cashless transactions.
Nowadays, people prefer using a Smartphone to make payments instead of utilizing traditional paper currency and avoid that bulky & heavy wallets. The platform of mobile wallets is not only convenient for users, but it has also created a career opportunity for aspirants.
So, before understanding the Mobile Wallet Business Model lets understands the what is the mobile wallet.
Understanding of Mobile Wallet :-
A mobile wallet is a way to carry cash in digital format. It also authorise an individual or business to pay and receive money through mobile devices. Person can link credit card or debit card information in mobile device to mobile wallet application or you can transfer money online to mobile wallet. Instead of using your physical plastic card to make purchases, you can pay with your smartphone. Mobile wallet provides secure place of making payments as it runs on encrypted software.
An individual’s account is required to be linked to the digital wallet to load money in it. Most banks have their e-wallets and some private companies. e.g. Paytm, Freecharge etc.
Types of Mobile Wallets in India:-
There are many types of digital wallets in India. The types are: open, semi-open, closed and semi-closed.
- Open mobile wallets: These types of mobile wallets are generally issued by banks. One can purchase goods and services, transfer money and also withdraw money through these mobile wallets.
- Semi-open mobile wallet: A semi-open wallet allows users to buy and purchase goods but not withdraw funds. In this type of wallet, one has to load money and use the same for any type of purchase.
- Semi-closed mobile wallets: These type of wallets allow consumers to make merchant payments. The mobile wallet company usually ties up with certain specified merchants.
- Closed wallets: In these types of wallets a certain specific amount of money is locked with the company. There is also no scope for withdrawal.
Operations can perform using a Mobile wallet:
- Transferring money from one person to another.
- Recharge data packs, mobile, and DTH.
- Pay utility bills.
- Keep track of monthly expenditures.
- Bookings train, buses, and airline.
How Does a Mobile Wallet Work?
Mobile wallets work by using Near-Field Communications (NFC)-enabled technology or QR code technology. They digitally store payment-related information in an encoded format for security reasons. There may be many variations of how payment information is stored and this varies from wallet to wallet. Apart from this, other information such as store coupons, loyalty programs, and other personal identity-related information is also stored.
A mobile wallet works by communicating with terminals using various types of information transfer technology most mobile wallets use NFC technology to communicate with payment terminals
Reasons to Start an E-Wallet Business in India?
Before commencing a business, an Entrepreneur must know the perks of opting that business model. Likewise, you must perceive the advantages of Mobile wallet business. Here are the top reasons to choose the industry of E-wallets:
- Easy to Access- Monitory transactions is a core of any industry be it e-commerce, education, health or any other sector. One cannot depreciate the value of cash in our daily operations. While considering the unsound conditions of present scenario, it’s better to keep some money in mobile than in the pocket. Further, Mobile wallets are much convenient and easy to use. It merely requires a user to download the app and create a user ID then; you are good to go.
- Time-Effective- One can skip making necessary payments in the hustle and bustle of work. Therefore, the Mobile wallet business offers a perfect solution to fix the problem of delays in payment. Now you don’t have to bear the penalty on late payments as you can access to auto-pay services of the E-wallet to make payments in advance.
- Streamline Fund Transfer- Mobile wallet has made the transfer of funds easy and swift. Furthermore, a platform of the electronic wallet does not levy any transaction charges for transferring money. So one can make at any time and anywhere.
You must consider a few important factors before establishing a Mobile-wallet application, such as:
- Carefully Integrate Function– Building a Mobile-wallet application is a multi-staged process that requires diligent actions to place functions. One needs to be alert while integrating the features of the digital payment application, otherwise suffer heavy losses. To make your business venture a success, do comprehensive market research and learn about customer’s preferences. Follow the latest trend and create a masterpiece.
- Tighten the Security- Any digital payment app gets identified as the most secure method of making payments. Therefore, do not breach the standards associated with a Mobile wallet business. Win customer’s trust by enabling them a reliable system wherein; they can store their card information without any hesitation.
- Add the Feature of Reward Points- If you wish to sustain a digital payment business for a longer run, then you must emphasize on customer’s expectations. By facilitating an array of added bonus and reward points to the users, you can strengthen your customer base. Hence, it helps you to nurture a strong position in the market.
- Provide Digital Receipt- Just like cash, the digital transactions should also provide receipts. A receipt gives confirmation to the users about the failure or success of a transaction. A digital receipt is a must-have feature in an E-wallet application.
Procedure to Set up a Mobile Wallet Business:
Follow this step by step guide to build a successful Mobile wallet platform:
- First Step- Conduct extensive market research and create a business plan accordingly. Prior to starting any business, it is indispensable for an Entrepreneur to study the tendency of growth in the market. Study the persistent digital applications in the market and examine their sale strategies. Besides, you can even scrutinize the history of the existing E-wallets and incorporate the best things into your business plan.
- Second Step- Hire competent staff that has years of knowledge and experience. Only professionals can seamlessly implement a unique business idea. Employ an efficient resource like product manager, CTO, senior engineers, system administrator, and creative designers to frame a robust mobile wallet application.
- Third Step- The execution of a plan needs a huge amount of investment. Determine an estimated cost required for building the Mobile-wallet app. Also, contemplate on the sources of fundraising in case of insufficient capital.
- Fourth Step- As per the RBI[1], every Mobile wallet system must obtain a Prepaid Wallet License. For acquiring the license, an applicant has to provide necessary documents and ensure to meet all the requirements prescribed by the law. Sometimes, Entrepreneurs should also be PCI DSS certified.
Conclusion: –
Mobile wallet transactions penetrate after the government demonetized Rs. 500 and Rs 1,000 in 2016. The Indian government has provided individuals with a variety of digital wallets, including UPI, BHIM, Aadhaar Pay, and Payment Banks, which have reshaped payment processes.
Accordingly India’s mobile wallet market is, therefore, flourishing at a high rate owing to the increasing number of smartphone users and growing awareness among consumers regarding convenient payment options through mobile wallets. Hence it provides the larger number of Business opportunity.
However the process of the mobile wallet registration is quite complex and can take some time. So, take assistance from MNRS and Associates