The India digital wallet market was estimated at US$688.843 million in 2020.
The Digital Wallet market in India is poised to surge at a notable CAGR on account of the rising adoption of cashless payments due to government initiatives toward a cashless economy. Digital wallets are financial accounts that enable users to make transactions through mobile devices. Rising smartphone penetration, along with rising internet penetration, are some of the key factors driving the digital wallet market growth in the country over the forecast period.
The growing e-commerce sector throughout the country, on account of the changing consumer preferences towards online shopping, along with the growing acceptance of payments through digital wallets by the various e-commerce companies, is also driving the market growth in the country during the next five years. Furthermore, the rising adoption of digital payments by retailers throughout the country on account of the Digital India Initiative by the Indian government is also anticipated to propel the growth opportunities for the market to surge throughout the forecast period and beyond. For instance, the Reserve Bank of India declared its aim to provide an offline, no-Internet-connection UPI on-device digital wallet in December 2021. The digital wallet is distinct from preexisting third-party wallets of a similar nature, such as Paytm, Phonepe, and others, and was designed to address the persistent problem of transactions failing for merchants owing to poor Internet connectivity.
Furthermore, the presence of various digital payment platforms such as Unified Interface Payment (UPI) and Paytm, among others, is also supplementing the market growth in the country over the next five years. The changing lifestyles of the population in the country are leading to the acceptance of more convenient ways of living, which is boosting the adoption of digital payments, as it makes transactions efficient with a single click.
Based on the device, the Indian digital wallet market has been segmented into PCs/Laptops and smartphones. Smartphones are anticipated to hold a noteworthy market share on account of the rising smartphone penetration, along with the availability of cheaper high-speed internet. For instance, according to the World Bank, the percentage of the population using the internet in India reached approximately 43% in 2020 from only 8% in 2010. All these factors are supplementing the growth of the smartphone segment.
Based on the application, the segmentation of the India Digital Wallet market has been done into money transfer, recharge, movie booking, food ordering, and others. The money transfer segment is anticipated to hold a notable share in the market owing to the wide adoption of these wallets for bank-to-bank transfers. The movie booking segment is anticipated to surge at a noteworthy CAGR because there is a rising adoption of digital payments for movie bookings on account of numerous benefits, such as discount coupons and food coupons.
India Digital Wallet Market Segmentation: