There’s a hint of a change in the Mobile Wallets space in India, and it isn’t looking good. For the second month in a row, there was a significant decline in wallet transactions, as mobile wallet transactions declined by 99.24 million in May and June 2017: that’s almost 31% down. Has Paytm stopped giving cashbacks?

Consider this: when the demonetization trend began, transactions had jumped up from 169.32 million in November 2017 (demonetization was inflicted on November 8th) to 213.11 in December. We’re very close to that level now, and it while the slide this month (down ~20M, around 8.3% ) isn’t as bad as the previous one (79.15M), it does suggest that this is close to becoming a trend.

Amount transacted using Mobile Wallets declined 26.2% month on month – down around Rs 1884 crores to Rs 5,310 crores from Rs 7,194 crores. This is the highest decline in Mobile Wallet Amount transacted, ever, but we aren’t at pre-demonetization levels yet.

This is the first proper hint of a decline, but it’s only a hint because we have only two data points. February, represented as a decline in the chart below, doesn’t count: the number of per-day transactions in February (at 8.82M per day) were still higher than January (8.44M). We’re now down to 7.38M per day in June. July will be important.

Someone fund wallets businesses quickly so that they can offer more cashbacks to address this decline. Or maybe this is post funding: usually marketing spends are increased when you need to show growth.

Prepaid Payment Transactions

The decline in wallets, which constitute a majority of the prepaid payment instruments, also had an impact on overall PPI numbers: For the month ending June 2017, number of transactions using Prepaid Payment Instruments (Mobile Wallets and PPI Cards combined) declined by 8% to 255.65 million as compared to 278.08 million in May 2017. The amount transacted went down 20% month on month to Rs 8,507 crores from Rs 10,669 crores.

 Number of transactions for PPIs (wallets + PPI Cards) decreased by 22.43 million in June 2017. Total amount transacted also went down Rs 2,162 crore.

With decrease in the number of transactions and amount transacted for the current month, the average amount per transaction has marginally. In June 2017, average amount per transaction for Mobile Wallets was Rs 240. A year ago it had been Rs 473.

Data Source: RBI