Digital wallets saw a spike in usage late last year, and they’ve been adopted by both people and businesses in the months that followed. Take a look at how the wallets have fared in rural and urban India.


According to a Google-Boston Consulting Group study, the digital wallet industry in India is pegged to grow to a staggering $500 billion in just three years. The number of internet users that are likely to adopt this technology is expected to 50% during this time. Moreover, it will contribute a sizeable 15% to India’s GDP, which goes to prove that going cashless is the way the country is headed.

Also, late last year, when insufficient cash reserves caught Indians unaware, digital wallets provided a simple solution: the same ease of access to your money, without having to transact with cash.

While urban India was quick to make the transition, and use mobile wallets to their full potential, the same can’t be said for smaller towns and villages. Let’s take a look at how both regions performed in their attempts to go cashless.

Rural India is riddled with apprehension

When it comes to rural India’s experience with mobile wallets, the problems are aplenty. There is poor connectivity and not enough awareness on how to use data on a smartphone. All this, however, assumes that people in small towns and villages have access to, or want to switch to a smartphone. But, sample this: A recent study by research firm Kantar IMRB showed that out of its pool of feature phone users, only 15% would consider shifting to a smartphone, a number that’s is far from encouraging.

Another facet of this problem is the fact that not all smartphone users use data. Gopal Vittal, CEO and MD of Airtel India recently said that out of all smartphone users, only 60%–70% use data. So, it is safe to say that the first hurdle one must clear is to get people from rural areas to use data on their smartphones, before acquainting them with digital wallets.

Add to it the issue of poor connectivity. Several countries such as Australia and Singapore have completely done away with 2G technology, due to a newer and better data network. In India, however, 2G is often the only network that actually works in rural and semi-urban areas. With insufficient infrastructure, these areas don’t have adequate connectivity required to use mobile wallets easily and quickly.

But most importantly, mobile wallets are a new concept, which makes it difficult for people to trust and accept implicitly. They don’t understand how to use it, nor do they trust mobile wallets because they are often not associated with a bank. When faced with several mobile wallets, it all becomes a bit overwhelming. Interestingly, Brand Equity spoke to women who were a part of Google and Tata Trust’s Internet Saathi programme. They found that while these women are keen to explore mobile wallets, they aren’t sure of how to use them and fear losing their money in the process. This is despite the option to choose a regional language in most m-wallets today.

However, the future for rural Indians adopting digital wallets seems bright. According to The Economic Times, in 2020, rural users will constitute half of all Indian internet users. With Mobikwik and Paytm tying up with over 15,000 kirana stores in rural India, using mobile wallets for payments becomes even more convenient.

How mobile wallets can help rural India

They are convenient and quick

When positioned as a tool that can free them of the hassle of standing in queues to pay an electricity or phone bill, the mobile wallet becomes an exciting proposition that makes payments simpler. Add to it the convenience of booking bus tickets and transferring money using just a mobile number, and Indians have on their hands a tool that can help them save precious time and energy.

They boost savings

Any technology becomes more enticing when it helps you save money. For an audience that is scared of losing their money when they transact using digital wallets, this is a USP. Cashbacks, discount vouchers, offers, and reward points help people save more and get better value in exchange for the money that they are spending.

They simplify finances

For an audience that has minimal financial knowledge, a mobile wallet’s interface is extremely user-friendly. It gives them a comprehensive overview of their finances, be it wallet balance, loan details, or transaction history. With all details updated in real time, this feature adds to a digital wallet’s appeal.

They eliminate the need for cash

To begin with, the concentration of ATMs has always been skewed in favour of cities. After all, only 15% of over 2 lakh ATMs cater to 67% of our population, that resides in rural India.  The limited availability of cash makes a digital wallet all the more important.

Modern Indian is raring to go

The urban landscape hugely differs when it comes to mobile wallets. To set the scene, it is safe to say that the average urban Indian is an early adopter of digital wallets. As of December 2016, 62.3% of internet users in India came from urban locations. Of these, 137.19 million use the internet every single day. Thus, when demonetisation was announced, the value of mobile wallet transactions in 2017’s first quarter exceeded 2016’s last quarter by 60%!

After all, whether it is to book movie tickets, order food, explore hotels, get one’s fill of the news, for a citizen in urban India, turning to the internet is a reflex action. This is primarily because they’ve had longer exposure to technology—both the internet as well as mobile wallets—which has led to more awareness. Moreover, they pride themselves on making smart, economical decisions, and are always looking to make life more convenient. So, mobile wallets are a seamless integration into their lifestyle. This is especially true for millennials and generation Z.

How mobile wallets help urban India

They offer enhanced security

Smartphones are password-protected (if not fingerprint-protected) and a good digital wallet uses highly encrypted procedures to protect their sensitive data. So on the whole, there is no worry about protecting oneself from online threats or malware. The mobile wallet takes care of it for you.

They suggest stores to help you save time

Certain mobile wallets give you vendor suggestions based on your location and past search history. This helps you find exactly what you’re looking for without putting in any effort yourself.

They offer services of an EMI Card, digitally

Wallets such as the Bajaj Finserv Wallet app helps take an EMI Card digital. It functions exactly like your EMI Card, without the need to carry it with you at all times. This also means that you have the provision to block your card using the wallet, in case of theft or misplacement via the app. Most importantly, it also allows users to purchase items at easy EMI. Combining affordability, security, and the freedom to transact at your own convenience makes this app a winner for the urban Indian.

It is evident that while the average modern Indian is comfortable with the idea of dabbling between different mobile wallets and understands how to leverage their features to suit him/her, to bring rural India on board, there needs to be greater involvement in building awareness and trust. Also, with more cash back into the economy, there must be sustained efforts to ensure that consumers are constantly reminded of the benefits of mobile wallets in the long run. Only then can India go cashless in the truest sense of the word.