Dhobi went online & wallets became mobile

Two unconnected events led to the explosion in the use of digital wallets in 2015. The first was an inconspicuous circular by Reserve Bank of India in 2014 stating that taxi aggregators cannot allow card payments without two-factor authentication. What this meant was that debit or credit cards could not be used for the smooth checkout allowed by aggregators like Uber. This provided an opportunity for digital wallet companies to step in with a less-riskier payment alternative. The second development was the surge in smartphone users in India with total numbers expected to cross 20 crore by early 2016. This has given a big boost to companies like Paytm, Oxigen, Citrus, Mobikwik, Payumoney. Digital wallets are already the predominant mode of payment for recharging phones, and DTH services are picking up pace in bill payments. What has helped sweeten the deal for customers are the heavy discounts and cashbacks offered by these companies. In 2016, these companies hope to make a mark in instore payments where cash is currently king. Wallet companies have added barcode scanners to their mobile applications which can be used to scan bills and transfer money to the shopkeeper instantly. The shopkeeper is given an app that generates the QR Code which can be scanned by customers. To make things more exciting, banks have lined up a host of deals that can be availed within their mobile wallets including booking of rail tickets without the hassle.