At 17.2%, Axis Bank commands the largest value share of mobile banking transactions but it’s Paytm that tops volumes with 22%. However, Paytm’s value share is a meagre 0.25%, according to State Bank of India’s (SBI) annual report for 2017-18 which has put out Reserve Bank of India’s data for January 2018. ICICI Bank has a 17.1% share of transactions by value and 9.7% by volume. SBI’s volume share has slipped by over 5 percentage points from nearly 25% at the end of March 2017 to 19.5% in January 2018. The lender has also lost value share from to 16.8% from a high 44.4% a year ago.
Mobile-banking usage itself has seen a steep jump, with volumes soaring a steep 91% to 1,871 million in FY18 from 977 million in FY17. Rajiv Anand, executive director and head of retail banking, Axis Bank, said while the digital payments market is changing, legacy banks continue to remain important players in the system. “Digital payments have moved from the traditional large-value, low-volume transactions with credentials managed by the bank to high-volume, low-value transactions with public credentials,” Anand said.
“While the new players are gaining market share in the latter, consumers seemingly still show confidence in banks for the former as evident from the transaction value market share enjoyed by banks,” he added. Savers with Paytm Payments Bank are allowed to keep balances of only up to Rs 1 lakh in savings accounts. Given Paytm has evolved from a wallet-based model into a payments bank, most of its customers typically make small-value transactions. The value of a single wallet-to-wallet transaction is capped at Rs 20,000.
At the same time, the numbers suggest the shift that may be effected by non-banks entering the digital payments space. Five payments banks — Airtel Payments Bank, Fino Payments Bank, Paytm Payments Bank, Jio Payments Bank and Aditya Birla Idea Payments Bank — have opted to launch so far. Of these, the first three have rolled out a full host of digital solutions. As more payments banks begin offering mobile-banking services, traditional banks may see their share eroded further, say experts.
Credit Suisse believes digital payments could become a $1 trillion market over the next five years and growth could be driven by payment integrations into popular apps, such as WhatsApp. “Data usage for 300 million Indian smartphone users has jumped to 5-10 GB/month from 1 GB in the last year,” Credit Suisse noted, adding, “Payment integration into popular apps in India will drive the digital payment market in India to US$1 trillion over the next five years.”