Why Paytm or other e Wallet have no future ?

What would be the future of eWallet in India. This is a very sensitive query raised as various digital initiative are taken by Big banks in India along with NPCI. A common question asked by many, “What would be the future of Paytm ?”. This was the question raised when NPCI launches BHIM, QR Code and Aadhaar Pay application. 

Whether these wallets companies like Paytm, Mobikwik, Freecharge etc survive the intense competition from larger banks and their applications like UPI, Mobile Banking, IMPS, Aadhaar Pay, AEPS, BHIM etc. 

Read : BHIM Aadhaar Pay Merchant Payment Apps – Download,Benefit and Comparison

[box type=”info” align=”aligncenter” ]Aditya Puri, the Managing Director of HDFC Bank, has said he sees no future in digital eWallets. After demonetization, people have grabbed whatever is easily available to pay for coffee, bills, movie tickets, cab rides and just about anything, he said. However, as alternatives to cash payments evolve, users comfortable with mobile wallets today could shift to an easier digital platform, he added.[/box]

The Paytm type of module is as like Alibaba.com, which can not be replicated in countries like India. It is well verge with Paytm current fiscal loss of Rs 1,600 crore. In the long run application which is having mass acceptance at traditional banking system like BHIM, UPI, Aadhaar Pay, AEPS etc will isolate these e Wallet as they enable direct transfer from bank accounts.

Mobile wallets have gained popularity after demonetization but limited to restricted age group. But as these big bank enters the digital banking environment with innovative products, eWallet may fade away as they have several limitations.

Read : Cash Transaction Charges on Withdrawal or Deposit

There are many other reason also for non success of eWallets like Paytm in India as they are not interoperable. Transferring money requires sender and receiver to have the same company’s account. There are also concerned about no interest payment on e wallets. The money transferred to a wallet does not earn interest. Small merchants can’t draw more than Rs 20,000 a month from a digital eWallet, which affects cash flow for their business in long run.