Mobile wallet still not catching on in India

I've yet to see anyone actually using their mobile devices as methods of payment in any form or fashion in India.

Even with the arrival of Starbucks last year, I had hoped the coffee chain would bring some of its advanced payment technology, such as Square, to Indian consumers. But, dead-end there. It only offers Wi-Fi connection at some locations. And McDonalds already provides 10 minutes of free Wi-Fi access here, and this service has been around for quite some time.

So what's the deal in India? Does the challenge lie with consumers or retailers? The answer is both. Regardless of how advanced and technologically enabled India is really, in contrast to what many might what to believe and think, old habits die hard. Attitudes are even more difficult to change.

Historically, India has been a cash driven society. As such, online retailers such FlipKart and Jabong also have cash-on-delivery options. When Amazon entered the Indian retail market earlier this year, it also opted to offer cash-on-delivery.

Also, Bangalore-based Ezetap introduced its US$50 Indian point-of-sale (POS) version of Square, and has set high expectations in terms of growth and sales across India.

According to TechGig.com, other factors such as Indian telecom operators' reluctance to hand over business to companies such as Apple and Google are also hindering the adoption of mobile payment. Then there are the banks, which are in the same predicament and are concurrently trying to push their own mobile apps to their customers.  It's also very challenging to persuade retailers in India to spend money and efforts on Apple's Passbook or Google Wallet. Devices are readily available for consumers to make the switch, but again, are they even interested or aware of what's available?

I've actually spent time discussing this issue with some of my friends, and not only were they not aware of these apps, they also didn't feel comfortable or safe to pay for transactions via mobile devices. Most felt comfortable with cash payments and debit cards.

Contrary to the West where people live on revolving credit, along with induced debt and horrid credit rating scores, credit cards are still not that popular among the general public in India. So again, cash becomes the default choice for transactions.

In my opinion, I think Indian banks should lead the initiative with Indian mobile operators and not only inform customers about the benefits and convenience of using a mobile wallet, but also educate the uninformed and of course, discuss the security issues people may have.

On the flip side, by the time everyone comes together and on board with a plan of action, it might be too late. Perhaps the mobile wallet is more of fad that will always be there, but never in high demand and with the high penetration expectations as initially anticipated.