Revolutionizing Payment Methods: The Convenience of Mobile Wallets

Introduction

Mobile Wallets allow ussers to transfer money from the bank to the wallet application in their phones and then using that money instead of cash or in some combination. Currently, there is a complete disorder in an economy (especially after demonitisation), especially when it comes to the cashless economy, where m-wallets are playing a major role. However, the growth of mobile-wallets is quite evident; but still, there is a big room to fill and a major limitation to overcome. There exist complete different segments of people who are not using the applications and hence, there is an opportunity to widen the audience.

The boon in the industry is the result of many factors including demonetization, ease of use, offers, and convenience. But on the other side, less technology readiness and computer literacy; a diverse group of people with diverse conceptions; and biggest of all, Security, are the reasons that many people are still skeptical about its use. In this phase of transformation of money transactions, when Indians are still hesitant of using debit and credit cards extensively, M-Wallets are getting good heed because it is less complicated and people do not have to share their details with the vendor.

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Largely, m-wallets can be categorized as- 1. Open wallets- These wallets give a free hand to users to buy services and products by withdrawing cash from banking networks. They only exist with the support of banks and need to take permission from RBI before launching. The maximum amount that can be stored in a wallet is INR 100,000.

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2. Semi-closed wallets- These wallets do not allow customers to withdraw cash but allow usage at selected merchants to buy products and services. Some of them also allow direct transfer to another wallet. Based on RBI guidelines on 12 Oct 2017, the maximum amount that can be stored in these wallets is INR 10,000 per month and it cannot be more than 100,000 for the entire year. 3. Closed Wallets? ?These wallets allow customers to buy services exclusively from the companies that have issued these wallets. A certain amount is always locked with the merchant. The maximum amount that can be stored in these wallets is INR 10,000. By leading India towards a cashless economy, M-Wallets are aiming at the transparent flow of money in the system. As mentioned, many factors shape the choices of people regarding M-Wallets. Mainly, the expectations of the users and satisfaction involved playing a major role. With the more people understanding its benefits, many companies like M-paisa, Mobiwik, Paytm, etc. have emerged enormously. The fin-tech industry is sprouting rapidly and m-wallets growth is directly related to it. Still, there is a certain group of people who do not look at technology with curious eyes; rather they are more scared of the threats that come with it. Easy and economical access to mobile phones to almost all regions and groups make circumstances favorable for these virtual wallets. However, India is still in developing phase and, financial and computer illiteracy is a major problem of the country, which hinders the way of M-Wallets. In addition, the threat to lose their hard earned money by some hacker or fraud is another major challenge to m-wallets. Many researchers have addressed the topic related to 'Adoption of M-Wallets in India' but one major gap I found is that they did not take into consideration the most of the people have rooted pre-conceptions and many times, misconceptions. Also, many have not taken detailed insights into factors like income and profession that broadly defines the adoption of M-Wallets.

Paper-1: Adoption of M- Wallet

A way ahead Mobile phones have evolved not only in their physical but in their usage also. They are no more only reserved for calling and texting but they are pocket-bank and pocket-laptop that everyone carries in their hands. M-wallets are the byproduct of digitization. However, the rise in the need for m-wallets is due to demonetization, as this paper suggests. There are several other methods of payments including net banking and plastic money but the evolution and penetration of smartphones lead to higher demand for m-wallets in India. People are not limited to use the internet for social media but they store receipts, business cards, and bills. Many brands run interesting offers exclusively for m-wallet users that attract them. In addition, fewer formalities and hence, user-friendly interface; and convenience to use helps in the acceleration of mobile wallets in India. In addition to this, the report says that age and gender plays a prominent role in adoption on M-Wallets. M-Wallets are easier than credit or debit cards are still not clear. ?

Paper-2: An empirical study of mobile wallets in India

This project report focuses on the advantages, disadvantages, and types of M-Wallets and focuses on their growth. According to the research paper, M-wallets get heed due to the nominal, ease and comfort of use. In addition, they are safer and save times. Confidentiality has definitely played an upper hand because, in a country like India, people are more insecure to share card details and hence, m-wallet solves the purpose for them. But since every coin has two sides, the research paper has detailed out its limitations without any biases. When on the one hand we are claiming that the need for m-wallet is growing in India, still there is a segment of people who still have not put their hands on such apps mainly due to lack of awareness and availability. A person requires some degree of minimum education to use m-wallet apps and the education reports are not in favor. Also, the availability of good internet connect at all the place is still a milestone to be achieved, especially secure public internet. Even if m-wallet is one touch payment, but what do with dead batteries? Moreover, what about the segment who use feature phones instead of smartphones? Despite the disadvantages, the report suggests that there will be massive growth in the use of m-wallet in years to come.

Paper-3: The effect of perceived security and grievance redressal on continuance intention to use M-Wallets in a developing country

When we are relying on technology for most important things, this research paper brings out a very important concern, i.e. security and grievance redressal. In the times when black money is the biggest problem in the economies of developing countries, including India, to keep a check on the flow of currency or control the unlawful money becomes important. But the reality check is that it is almost impossible to get cent percent results, whatsoever method government may use! In such a scenario, m-wallets can be a sigh of relief as it brings transparency because it is connected to a bank account of the user. This study highlights the impact of usefulness, security, ease and grievance redressal. The better the quality of these, the more it will enjoy the attraction of young generation. In conclusion, the study reveals that security brings greater customer satisfaction, especially amongst the millennials. Also, the timely grievance redressal will bring a sense of trustworthiness in them. The ease of using m-wallets is already a boon. It's notable how the people of developing countries, India in specific have different technology or m-wallet app consumption pattern than those of developing countries. Insecurity of sharing private details curbs one from using plastic money, which is not the case with developed countries where citizens are secure.

Paper-4: Gaps in customer satisfaction with Digital Wallets: challenge for sustainability

M-Wallets have made their way in the market but growth and fall of each concept always depend on certain factors. The growth of m-wallet, how they will evolve to reach more people will depend on if the gaps will be fulfilled or not. A trust of any user depends on what the product promises and how much of it is fulfilled, so is the case with m-wallets. According to this research paper, the amazing rewards and discounts help in the sustainability of these applications. In addition to this, instant money transfer without any fee is another boost to the innovative concept. Despite the advantages, there are certain spaces left to be discovered and gaps to be filled. The research paper centers that attractive offers and convenience of use are hikes for digital wallets but on the other hand, there is still a space in what people want and how much is compensated.

Paper-5: Financial literacy and usage pattern of Mobile Wallets across gender categories in India

This paper suggests that M-Wallets can be seen as a substitute for online payment in the near future. Also, it focuses on fewer threats and challenges in digital wallets, though it also reflects that security of money is an issue. In this study, researcher has categorically researched on gender behavioral pattern.

**The debate on digital transactions and the merits of a "cashless" economy engaged public attention in India in the past year. This paper steers the debate towards articulating an appropriate strategy that can bring the Indian economy closer to becoming "cashless". The paper begins with an exposition of the theoretical model of the digitalization process, identifying a set of core structural parameters that determine a nation's readiness to make the paradigmatic shift from being cash-based to cashless. It reviews India's performance on these parameters and demarcates sources of deficiency. The paper also describes the lessons that can be learned by India from the experience of the nearly cashless, Sweden, as well as the rapidly transitioning China.**

Paper 6: Consumer preference and satisfaction of M-wallets: a study on North Indian consumers

The study has revealed the significant relationship between consumers' perception, preferences, and satisfaction. Consumers' perception of the m-wallet shapes their preferences. It is indeed important to create a better perception by providing maximum customer satisfaction. In the study, demographic variables like gender and age were also considered as important factors as each segment has its own behavior pattern. The youngsters will adapt the applications faster than the group in of people in their 40s or 50s. What is unique in the study is it has taken into consideration the usage of m-wallets and specifically targeted north Indian audience. The study talks about consumers' perception about where they should preferably use m-wallets. Mobile wallet applications have still not reach to the peak where each customer uses it everywhere. Its consumption pattern is selective for most people. In addition, security, convenience and trust play a major role in intention of customer. For the company's side, they should find out what are the most common m-wallet applications and is the need of their customer and then add more offers that are attractive on that particular platform.

Paper 7: Mobile payments in India: the privacy factor

The study targets adoption readiness of m-wallets, technology readiness and privacy concerns. These three are the most basic yet important topics to elaborate on as success or failure of m-wallets in India largely depends on these factors. People who have adopted technology or are willing to do so, are more inclined to use m-wallets in comparison to those who are afraid to put their hands on technology. There are several reasons for the people to shy away from technology in a developing country, India. A most important reason is security, followed by literacy and availability. Those segment of people whose main reason is security is difficult to convey its usages as they are ready to pay more or cash but can't afford to get their details out( as their fear is). The witness in the rise of m-wallets is mainly due to demonetization when people had less cash. But soon after, when cash flow becomes stable not many people stick to them-wallets and switched quickly to their traditional ways of using cash. The study also suggests that using m-wallets can lead India to better social and economic level as it can curb corruption largely and can reduce tax invasions in the country. The study suggests that it might face resistance but if people are educated about privacy concerns, then m-wallets might get a boost.

Paper 8: M-Wallet Technology Acceptance by Street Vendors in India

The study conducted with its focus on milk vendors, vegetable vendors, and roadside service repair shops. The outcome was the same for the three types of vendors. Security is a major concern, followed by literacy. Such vendors are the most common places for buying grocery in India. The reasons that these vendors are afraid to use m-wallets includes trust, unsafe transition, and privacy of data. Most of these vendors aren't well educated and hence, they are afraid in first place of bank accounts due to many formalities. Since the government has relaxed the procedures, there is an increase in adopting bank services by these vendors but the number is still less. Those who have accounts and can have access to m-wallets have trust issues with technology. They are not very well versed with technology and can easily believe any rumor that comes out from the crowd. Hence, they feel they might lose their hard-earned money if data of m-wallets leaks. These reasons are common to the three types of vendors. The better education and understanding of such technology will help in accelerating the demand for m-wallets. The content that should be used to make them understand needs to be relatable and simple.

Paper-9: Acceptability of the m-wallet system in India

Though smartphones have become an important part of our lives and are essential to many routine activities, still many functions that it does are still not accepted completely by its users, especially in India. Smartphones are no more a luxury, like a decade ago. Today, they are available in all prices and are very accessible. The study emphasized on acceptance of m-wallets when smartphones are its peak. Smartphones are more than social media applications and phone calls, now they can do most functions that a computer can do, sometimes more than that! In a country like India, people shy away from sharing their card or bank details in inline transactions or even with mobile wallets because of factors like trust and hacking. Also, the infrastructures provided have many times came up with technical issues and details leak news, which makes their point strong. But if these infrastructures focus highly on a secure system and educate people about it, the acceptance of m-wallets will increase.

Paper- 10: Study on consumer perception towards digital wallets

Mobile wallets are emerging as a great option for startups and young entrepreneurs. There is a slow shift from cash on delivery to e-payment. Technology is meant to cater to the needs of people and make their lives convenient, therefore, a smartphone is a savior and m-wallets are pure-play taking a step ahead in fin-tech! The only problem is lack of awareness amongst the audience. Some segments are very welcoming to these technologies but there are others, who are hesitant to use them. Government's initiatives like Digital India, Make in India, have given some space to m wallets but for the further growth of is to be seen, it is only will happen only by spreading awareness in the other segments and expanding their target audience, resulting in a wider consumer base. The consumers who are already using are enjoying a delightful and easy payment method. But those who maintain distance from such easiness and are scared of losing the data should be explained the use, especially in times when we are leading towards a cashless economy.

Paper-11: Mobile Payments in India: Drivers and Inhibitors

Even after liberalisation, many people remained poor and had no access to basic needs like education and banking. Gradually, India started to develop and banks decided to reach its customers where a customer cannot reach banks. When this idea was taken further, net banking became a common term, but still not so common. Then, recently, now we have m-wallets, which are completely driven by technology. So, if the people will accept them or nor will completely depend on awareness, technology readiness and computer education. This study was conducted at 4 major and mid-sized cities of India to understand their attitude towards technology in general as well as towards m-wallets. Major takeaways from the research include that m-wallets can help in reaching financial inclusion. In addition, the mobile payments system majorly depends on the inclination of people towards technology and if they are ready to adopt new technologies. Other than human readiness for technology, it also depends on how technology behaves; it must be secure and reliable. There is a lot more research, which is still required to touch upon the nooks and corners of the issue.Paper-12

Updated: Apr 29, 2023
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Revolutionizing Payment Methods: The Convenience of Mobile Wallets. (2019, Dec 02). Retrieved from https://studymoose.com/mobile-wallets-essay

Revolutionizing Payment Methods: The Convenience of Mobile Wallets essay
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