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INTRODUCTION
Introduction and Brief History
The first company to start a Mobile wallet business was by Google in 2011 with Google Pay Send and later joined by Apple with iPhone 6 in 2014. It was called Apple Pay and allowed users to make purchases from their phone using NFC (near-field communication) technology. In 2016, Xiaomi released Mi Bank, which is the first mobile wallet on Android, with a focus on China. This allowed for the creation of bank cards that could be used through their phones. More recently in 2018 , Samsung launched the Samsung app wallet to allow their users to make payments via their phones
Oxigen wallet was the first ever e-wallet service to be launched in India way in 2004. Later wallet365.com was launched by Print Media magnate Times of India group in association with YES Bank in 2006. Bipin Preet Singh and Upasana Taku later founded the Mobikwik in 2009 as a mobile wallet company.
1. What is a mobile wallet business?
A mobile wallet is a digital platform that allows users to store their credit cards and debit cards, coupons, and other digital payment methods in one place. The mobile wallet app is a gateway to all of these items. Mobile wallets are important because they provide convenience for consumers and security for businesses.
2. What is the market size of mobile wallet business in India?
Mobile wallets in India are only becoming more and more popular. India’s mobile wallet business is worth US $30.1 billion, and it is predicted to grow at a CAGR of 16% by 2027, to an estimated US $430 billion by the end of 2027 (Source :Blueweaveconsulting)
But, it is not as big as it is in China which is estimated to be around $5200 Bn around 2027.
The mobile wallet market in India has seen a surge in recent years. The number of transactions done through these wallets had increased by over 22% from 2017 to 2019. But post COVID Pandemic that rate of transition to digital payments methods has surged almost 3 times from 2019 to 2021.
3. How does a Mobile Wallet business model work?
The key to the mobile wallet business model is that it is a digital wallet. It stores all of your credit cards, debit cards and loyalty cards digitally. This means that you can use it to purchase goods and services at any store or online retailer that accepts credit cards.
There are two types of mobile wallet business models:
(1) Mobile payment, which is a service that allows the user to make payments with their phone, and
(2) Mobile e-wallet, which is an application that stores all of your credit cards, debit cards, loyalty cards and offers in one place.
Mobile wallets are not just for financial transactions. They have the potential to become a platform for commerce and for mobile marketing.
Mobile wallets are a lot more convenient than traditional wallets because they don’t require you to carr your cash or plastic cards with you all the time in order to buy things. All you need is your phone with access to internet which most people have these days and you are good to go and make payments.
4. How does Mobile wallet business generate Revenue?
Mobile wallet business is a business that offers payment services to consumers through the use of mobile devices. Mobile wallet business has been generating revenue from different sources. It generates revenue from transaction fees, commissions, advertising and in-app purchases.
Some Mobile wallets may charge a small fee even when used to make purchases and online shopping. They may also charge a fee for peer-to-peer transactions – like sending money to friends and family members. However most wallet companies these days do not charge any fee to its users for online shopping and online payments.
The most common Revenue generation model for mobile wallet businesses depends on the type of service they offer:
1) Commission model: The Mobile wallet company earns a commission fee form the service providers, operators and vendors every time a person makes a payment for Bills, Recharges, Educational fees etc, using their Mobile wallet.
2) Transaction model: The company charges a fee to customers every time the user make a transaction with their mobile wallet. For e.g Deposit, Withdrawal, and Money Transfer. They may also charge slightly higher fees for other services like International transactions, Negative balance, Over Draft facility and other services.
3) Advertisement model: This model is based on advertising revenue where companies charge advertisers who want to reach specific audiences through targeted ads that are shown in the app.
4) In-App Purchases: In-app purchases are on a mobile wallet typically contain digital goods or services that are accessed through the app. This may include resources such as virtual currency, content, upgrades, and more.
Mobile Wallet companies generally use a combination of all three revenue models to generate income for their business. Though this digital wallet company aren’t making huge profits as most of their services are free buy they’re certainly not losing too much either.
5. What are the Different Types of Mobile wallet

The types of Mobile Wallet will generally differ depending upon what kind of transactions you can do with them.
There are 3 different types of Mobile or Digital wallets;
1. Closed wallets
A closed wallet is a digital wallet that can only be used for spending money only within the app which originally issued the Digital wallet. So when the customer deposits any amount of funds in that wallet, it can only be used to buy goods and services from the company’s own website only.
The funds in the account can be spent on online shopping within the app and other in-app purchases, but cannot be used for deposits or withdrawals. In India Amazon Pay, uses the closed wallet system for it users.
2. Semi-closed wallets and
A semi-closed wallet is similar to closed wallet but with slight difference. The only difference is that semi -closed wallets allow you to make payments to certain merchants and partner sites both on their websites or physical locations who are on the merchant list of the same issuing Mobile wallet company. Google pay India as example of semi closed digital wallet.
3. Open wallets.
Banks issue the Open wallets. You can use these wallets across all platforms for payment and withdrawal. You can also withdraw cash from ATMs if and when required. Open wallets allows its users to send and receive money all around the world. However, this only applies if you both have access to the same wallet application.
6. How to develop a Digital Wallet Application or Mobile App?

Developing a Digital Wallet App is meticulous process. The Digital wallet app should have all basic features required for payment apps. There are may be other additional features you may need to develop and add to your app in order to make it more attractive to the users to get them onboard your platform.
a. The basic feature of a Digital wallet App are :
Users profile: The app should be able to create user profile wherein The user can store all the details such as Mobile numbers, Name, Address, Bank Account details, Transaction details, PIN Change etc. in the profile.
Authentication: Authentication is a standard feature for any application that’s deals with sensitive information like Bank Details and personal information.
Transfer Money & Balance Information: Users can Add money to the Digital wallet from their bank account and transfer the balance to other Peers. Check their Account Balance and transaction details.
Online Bill Payment: The feature enables users of to complete their bill payments in the app from the list of predefined operators and merchants.
Scan QR codes: This feature should allow the digital wallet user to scan any Sellers, Merchants or Peers QR codes and make payments immediately.
Generate Payment Links: This feature allows digital wallet users generate payment link in the form of QR Codes within the app or send a payment link via SMS or other messaging services.
Rewards Points: This feature should allow the users to get redeemable loyalty points, coupons, cash backs, gift cards etc. after a payment transaction.
b. Steps For the Development of Digital wallet Apps
Conceptualising: The first step of the process of app development is to visualise and draw a rough sketch of the App like its designs, typography, looks, features etc. This should be done by determining your target audience, their ultimate goal and how this app will benefit them.
Research other Digital App in Market:: The next step is to start research on other similar digital apps in the market. This includes inspecting and testing features and usability of other Digital app currently present with similar business models. All these testing will help you draw a basic outline and rough diagram of your Mobile wallet App.
Developing a UI design: To make your Digital wallet app is visually appealing, you need to pay close attention to the user interface (UI). The UI design has a big impact on the attractiveness of your app it’s views and alignment, as well as its performance in terms of speed, are all aspects which influence how attractive it will be.
Testing the Mobile Application: The last step to building any mobile application is testing. Try to foresee all the possible reasons like errors and bugs that might break your app and fix these errors during rigorous testing.
Launch: Of all the steps in the Mobile wallet app development process, launching is by far the most important one. Successful execution of this step make it possible for you to focus on other areas of your business, like traffic, marketing and SEO.
Technical support and monitoring – With any App, you will encounter technical problems and bugs. You should provide support for this so that the application stays improving and functions seamlessly for the intended purpose.
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7. How much money or capital required to start a Mobile wallet business
Starting a mobile wallet business is not an easy task and is a highly capital intensive businesses in the fintech industry and any entrepreneur should be prepared for the challenges in front of them. To, start a Digital wallet business will require a huge rounds of VC funding which should not be less than $2 million or ₹20 crore, or seed funding which is around $550,000 or ₹50 Lakhs.
8. How to seek Funding for your Mobile Wallet or Digital wallet Business
The Mobile wallet or Digital wallet app industry is growing at a rapid pace. In order to be successful in this industry, one needs to have the right business model and massive funding’s for various stages of business like App development, technical hiring, offices, salaries and for marketing. it is important to know that any fintech business is a highly capital oriented business especially in the very beginning as you may have to literally burn cash for initial customer acquisition.
In such a highly capital intensive business understanding of how to seek funding for your Mobile wallet business is absolutely crucial.
The first step to getting funding for your Mobile Wallet app business is to create a comprehensive business plan. The plan should contain a clear outline of the product and its future goals. It should also include information about the founders, their backgrounds, and how much seed money they need to get started.
You can then start looking for investors. Investors can come from many different sources such as
- Banks,
- NBFC’s
- Venture Capitalists (VC’s)
- Angel investors,
- Foreign Institutional Investor (FII)
You can find other investors or co-founders or partners through networking events and online forums like AngelList or LinkedIn Groups.
You also need to do some research on the investor before you approach them with your idea. Find out what type of investments they have made in the past and what their interests are. This will help you tailor your pitch so that it’s more likely to be successful with them than it would be with other potential investors who might not be interested in what you’re offering because it doesn’t
Here is a list of top angel investors or VC’s in India who invest in Fintech businesses
9. What are the requirements of licenses and permission to start a Digital wallet business in India.
To, Start a Digital Wallet business in India is no easy-peasy task. There is long list of regulatory compliances to follow and the licenses required to start a Mobile wallet business in India is issued by RBI after rigorous scrutiny of the applications.
These are host of regulatory compliance in place by RBI which has to be followed diligently and no lapses or violations of any kind is acceptable.
Here are the list of Permissions and licenses required to start a Mobile wallet business in India.
- Legal Formation of a Registered Company by registering with the Registrar of companies under Companies Act 2013 at the (MCA) Ministry of Corporate Affairs.
- For the License filling an Application under Regulation 3(2) of Payment and Settlement Systems Regulations, 2008. with the Reserve Bank of India(RBI).
- The RBI Shall screen the application rigorously and check for the applicants eligibility. Subjected to approval of the application an “in principle” approval is granted to applicants with the validity period of Six Months.
- The Company then has to mandatorily submit the System Audit Report to the RBI within six months from the date of ‘in principle’ approval is granted. Failing to submit the SAR report on time will lead to automatic cancellation of the ‘in principle; approvals.
- If all the necessary terms and condition of the RBI are met successfully by the applicants company in the given time frame. Then the RBI would grant the final Certificate of Authorization for the commencement of business.
Compliances
a) The Mobile Wallet Companies will mandatorily need to follow all the rules and regulation in accordance with the RBI
- Master Directions on Prepaid Payment Instruments (MD-PPIs), 2021 (“PPI Regulations”)issued by the RBI
- Master Direction – Know Your Customer Direction, 2016 issued by the RBI
- TheReserve Bank – Integrated Ombudsman Scheme, 2021 (as amended from time to time) for grievance redressal of customers.
- Guideline for System Audit Report (SAR)circular issued by RBI
- TheEligibility Criteria for RBI PPI License for Mobile wallet Payment Companies in accordance with the RBI regulation.
The above rules and regulations are subjected to change from time to time by the RBI and Government of India.
It is highly advisable to consult a Licensing agency to get the full list of approvals. One which is well versed in the legalities and rules and regulations to smoothen your licensing process.
10. What is the future scope for mobile wallet business in India?
Mobile wallets are a new age of Digital economy that has started to emerge in India. With Indian’s gradually adapting to the idea of mobile wallet and their wide spread acceptance especially during the Covid Pandemic, the bar is set high and is only set to grow further.
This can be attributed to rapid penetrations of the 4G network in the rural India and the introduction of 5G network in the urban centres of India. With the rapid rise of the smartphone users base in India over the last decade, digital payments have become accessible, reliable and hassle-free.
There are great opportunities for new Mobile wallets businesses to grow in India with expansion of economy in the near future. Digital wallets companies which brings in new innovation and technology will definitely survive and thrive in the times ahead.
11. What are the benefits and advantages of using a Mobile wallet
Mobile wallets are fast, secure and easy to use, with no need for physical cash or cards. Most importantly, they give the user full control over their finances as they can transfer and spend money across devices without any fuss.
Mobile wallets have the potential to be safer than cash or credit cards since they can be remotely disabled in the event of theft or loss.
Mobile wallets can be used for many different transactions, like bill payments – DTH, electricity, water, etc and buying tickets to various events. They’re also being used in everyday-life situations: groceries, money transfers and more
A mobile wallet can be your Saviour in case of emergency. Most apps come with an autopay feature and the app will automatically pay your bills and send you a reminder before the due date. This way, you don’t have to worry about remembering when it’s time to pay your bills.
Mobile wallets often have promos that you can take advantage of by saving your money.
12. List of top most Digital wallet business in India?
There are a number of digital wallet companies in India. Some have been very successful while other are catching up with top companies quickly.
Here are the top 5 Mobile wallet or Digital Wallet companies in India.
Conclusion
The digital wallet business is a booming industry with opportunities for growth and expansion. Because of the convenience and time savings, people are willing to pay for this service.
Digital wallets are a new way of shopping online. They are not tied to any one retailer and they allow customers to buy from different stores with just one click. This is a simple but very powerful feature that will change the future of e-commerce.
The conclusion for digital wallet business is that the future is bright for these companies. The convenience and simplicity of these wallets will allow them to continue to grow in popularity, which will lead to more revenue for the company.
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