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At a time when e-wallets are gaining acceptance in the country, riding on the back of demonetisation, HDFC Bank Managing Director Aditya Puri is of opinion that digital wallets have no future.
"I think wallets have no future. There is not enough margin in the payment business for the wallets to have a future," Puri said at the annual Nasscom India Leadership Forum, adding that wallet business model is “not viable”.
Taking a dig at PayTM, he said the e-wallet company’s current loss was at Rs 1,651 crore. You cannot have a business that says pay Rs 500 bill and take Rs 250 cashback," he added.
Puri was also of opinion that wallet companies cannot copy the Alibaba model, though successful in China, as Indian regulators are stringent.
When contacted by BusinessLine, a PayTM spokesperson declined to comment.
Mobile wallets such as PayTM, Freecharge and others are gaining ground in a country where a large chunk of people do not have a bank account but have mobile phones.
The wallet market is forecasted to hit $4.4 billion by 2022, with an annual growth rate of over 148 per cent from 2017-22, on the back of rising smartphone ownership, rise in internet connectivity and ease of use.
Stating that banks also have wallets for e-commerce transactions, Puri said the standalone wallet companies depend on the bank as an intermediary to get the funds.
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