BENGALURU: India is observing a sudden boon in mobile wallet usage among tech-addicts. Whether it is mobile recharge, bill payments, or online shopping, users are more inclined to use these services considering the discounts and offers related.

Observing this user shift towards digital transactions and leveraging wide merchant network and an on tap customer base, traditional banks such as ICICI, HDFC, AXIS, and SBI have launched their own payment systems experimenting in this space the past year, reports Joel Rebello & Pratik Bhakta, ET.

It is interesting to observe that these banks already control nearly 40 percent of Indian banking assets. Having launched new payment platforms, the banks are taking on the battle with established mobile wallet companies to prevent customers from moving their money to newly emerging non-bank companies. SBI’s Buddy, ICICI's Pockets, HDFC Bank's PayZapp and Axis' Lime are among the banking products fighting competition with non-banking wallets such as PayTM, Freecharge, and Mobikwik.

While mobile wallets such as PayTM are spending millions on sponsoring and advertising to get their brand ahead of the competition, the banks holds advantage of existing brand value that cut their marketing costs. Utilizing technology partners in innovation is also keeping the implementation costs low for the banks such as SBI.

For PayZapp users, HDFC Bank is offering attractive discounts leveraging the bank's merchant and customer base. Further, the bank plans to facilitate all forms of transactions that the customer uses. While, in the physical world, the user can use the credit card and the debit card, in the mobile world he can use HDFC wallet. The bank looks forward to replicate its offline success in online modes as well. At present, HDFC bank leads card based transactions with a network on 3 lakh POS terminals.

However, the wallet companies consider banks initiatives less of a threat. The reason proposed is the inability of the banks in ensuring required attention in this sector. According to them, the banks are excellent settlement engines, but when it comes to user experience, wallet companies have been able to train 123 million people over the last five years to make digital transactions without glitches.

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