Top 4 Digital Wallets – FinTech companies minting money in demonetised India

Editor | Nov 12, 2020

One of the biggest newsmakers that dominated 2016 has to be Demonetization. It would take at least a few years to calculate the gains/losses and the full effect of this move taken by the Indian government. However, there is one digital industry that was an immediate beneficiary. It is – Mobile Wallet firms.

Indian e-wallet companies have been around for at least 6-7 years, but their popularity has increased in the last two years. To be precise, it reached its peak soon after the ban on Rs. 500 and Rs. 1000 notes was announced in November 2016.

Wallets and sellers – perfect match

Cash-on-delivery is not only a huge concern for online sellers but also for ecommerce companies. The efforts and innovative strategies such as Digital India campaign started by the Indian government, gave everyone hope that 2016 could be the year when the dream of cashless economy would come true. It was also one of the IOS’s predictions for 2016. The demonetization has at least kick-started the cashless trend and sellers appear to be happy.

Digital wallets bridge the gap between COD and card payments. By accepting payments through e-wallets, offline and online merchants can reduce their returns and increase sales. How? Because it weeds out fake COD orders and customers find wallet payments far more convenient than making card payments.

“Wallets help us use all the cashbacks which these wallet companies are bleeding… We take extra charge from customers for cod. To avoid that, customers prepay. We see a balance between use of wallets and options such as PayU,” says online seller Kush Agarwal while speaking to IOS.

When asked about the pros and cons of e-wallets Agarwal says,

“I am not sure why sellers are not tying up with digital wallet companies. We have had huge response to it. There are no cons. Pros are that we can use the cashbacks, gives customers flexibility on payment. Not all consumers trust websites with credit card. Demonetization or not, COD is killing sellers. Best option is to tie up with all kinds of payment services and take only prepaid orders.”

Now that we know e-wallets are beneficial for an online and offline business, let’s take a look at the top each fin-tech companies offering this service.

Wallets by FinTech companies


No surprises here! It leads the digital wallet market, more so after demonetization. Launched in 2010, this Noida-based fin-tech company was founded by Vijay Shekhar Sharma. Now it has transformed into an online marketplace, but its core identity is still of an online wallet and recharge firm. Paytm’s fortune changed after Chinese ecommerce giant Alibaba’s founder Jack Ma invested in the company. With 165 million e-wallet users and 1.5 million offline merchants as of now, the firm aims to touch 500 million wallet users base by 2020.


Founded by Kunal Shah‎ and Sandeep Tandon, the company has been around for 6 years. But it made it to the front page in April 2015 after Indian etailer Snapdeal acquired it. Freecharge’s association with Snapdeal has worked for it, because it is now one of the biggest players. Post demonetization, it has witnessed 10X growth in merchant on-boarding. As of now, it has more than 30 million vendor accounts.


It was founded by Bipin Preet Singh and Upasana Taku in April 2009. In spite of a year’s lead, Mobikwik lost the leadership position to Paytm. But gradually it is closing the gap. Recently, the firm tied up with 30 lakh street vendors. Post demonetization, Mobikwik’s traffic increased by 100X and app downloads by 200%. Mobikwik has over 2.5 lakh merchants and more than 40 million users listed on its platform.


A relatively new player, Oxigen was established in 2014. But in a short period of time, the company has climbed up the popularity ladder. It has more than 15 million active users, over 15,000 online and offline vendors, a wide network of over 100 banks and 14,000 trade partners scattered around the country.

Top 4 players’ rate chart

Most of the companies require you to enter your email id, active mobile and basic details in the online form to register for the merchant wallet account. The documents required depends on the kind of account you sign-up for – a KYC or non-KYC account. Some of the KYC documents are Passport, Voter’s Identity Card, Driving License, Aadhaar Card and Pan Card.

Who leads the digital wallets’ market?

Ecommerce biggies Amazon and Flipkart too have launched their own wallet. Amazon Pay Balance was launched a week back and Flipkart’s PhonePe wallet made an appearance in August 2016. Many banks have their own wallets such as State Bank of India’s SBI Buddy, Yes Bank’s YES Pay, ICICI’s Pockets, HDFC Bank’s PayZapp and Axis’ Lime. Telecom service providers offer Tata mRupee, Airtel Money and Vodafone M-pesa. Then there are of course wallets by payment gateway companies like PayU Wallet, and Citrus Wallet.

Standalone wallet firms like Paytm, Mobikwik are fairly popular these days. But they do have their own flaws. Many believe that new customers and merchants (especially offline vendors due to demonetization) would prefer to sign-up for Paytm and the likes, because it is easy, require less documentation and economical.

Hrishikesh Datar, CEO, shares with IOS,

“We have been using both Paytm and Mobikwik for a few months now and around 15% to 20% of our users pay using one of these wallets. The biggest incentive for them to do so is the cashback, particularly as ticket sizes on our platform tend to be large.”

But those with years of online selling experience believe that it’s hard to beat payment gateway biggies like Citrus and PayU.

“The experience, overall, is good; however, our customers occasionally complain that the cashback has not been processed. Also, the merchant dashboard is basic and is nowhere near what a payment gateway offers,” Datar adds.

Almost every Indian online marketplace and banks of all sizes have launched their own wallets. But would they be able to compete with the digital infrastructure of seasoned players.

Another seller Sugam Jain wrote a valid point below this IOS article,

“I don’t think anybody is going out of business, even if every major player makes their own wallet, there are millions of SMEs which would still need others like Citrus and PayU.”

It is also clear that the move taken by standalone wallet firms to waive off their charges is only temporary. The charges would be back as soon as the hoopla around demonetization settles down and the currency crunch normalizes. In addition, several reports have also raised concerns over the safety and security standards followed by Mobikwik, Freecharge, Paytm and others.

So Indian Online Sellers, do you find digital wallets to be useful? Do you think it helps to combat the COD issue? Which one do you use – standalone wallets, banks’s wallets, telecom firms’ or payment gateways’ wallet?

About Author



Editor team is specialized in introducing the marketplace content targeting the Indian online sellers. They plan and coordinate to bring the appealing content for the small businesses on how to partner with the e-commerce sites like Amazon and Flipkart and strategies for improving their online business. 

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