We make the
 
world a more
 
secure place to
 
live in…
 

 
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Business Overview
Digital Wallet

A software, electronic device, or online service that enables individuals or businesses to make
transactions electronically.

What is a Digital Wallet?

A digital wallet refers to software, an electronic device, or an online service that enables individuals or
businesses to make transactions electronically. It stores the payment information of users for different
payment modes on various websites, along with other items such as gift coupons and driver’s licenses.
A digital wallet is also known as an e-wallet.

Traditionally carried in the form of a smartphone app, a digital wallet can also exist in other forms,
such as a desktop. However, the mobile app is the most popular version of the digital wallet, owing
to its mobility and flexibility.

Digital wallets are not only convenient to use in certain cases but also safer than traditional wallets.
Users of digital wallets need to download the specific apps created by banks or trusted third parties to
avail of the service.

Significance of a Digital Wallet

 A digital wallet securely stores all the payment information of users in a compact form. Thus,
it greatly reduces the need to carry physical wallets.
 Companies that need to collect consumer data for their marketing needs can benefit greatly
from digital wallets. They get to know the purchasing habits of consumers and increase the
effectiveness of the marketing methods of their products. However, it leads to a loss of privacy
for consumers.
 Many developing countries using digital wallets may be able to increase their participation in
the global financial market.

 
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 Digital wallets allow users to transfer funds to friends and family residing in different nations.
 Moreover, digital wallets eliminate the need for physical banks and companies in order to open
and maintain a bank account.
 A digital wallet is required to make transactions and maintain balances of crypto currencies.

Types of Digital Wallets

The following are the three types of digital wallets:

1. Closed Wallet

A company selling products and/or services can develop a closed wallet for customers. Users of a
closed wallet can use the funds stored to make transactions with only the issuer of the wallet. The
money from cancellations, returns, or refunds is stored in the wallets.

2. Semi-closed Wallet

A semi-closed wallet allows users to make transactions at listed merchants and locations. Although
the coverage area of such wallets is restricted, both online and offline buying can be done through the
wallets.

3. Open Wallet

Banks or institutes partnered with banks issue open wallets. Users with open wallets can use them for
all transactions allowed with a semi-closed wallet in addition to withdrawal of funds from banks and
ATMs and transfer of funds.

 
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Fintech Market in India

India Mobile Wallet Market Witnessing Growth Spurts: Forecast to Grow at a CAGR of 46.3%
by 2027

A recent study conducted by the strategic consulting and market research firm BlueWeave Consulting
revealed that the India mobile wallet market was worth USD 30.1 billion in 2020. According to the
study, the market is estimated to grow at a CAGR of 46.3%, earning revenue of USD 429.2 billion by
the end of 2027. Mobile wallet transactions spiked after the government demonetized Rs. 500 and Rs
1,000 in 2016. The Indian government has provided individuals with a variety of digital wallets,
including UPI, BHIM, Aadhaar Pay, and Payment Banks, which have reshaped payment processes.

Market Growth will be driven by the Increasing Number of Smartphone Owners & Internet
Users

According to the IAMAI-Kantar ICUBE 2020 report, India's number of active internet users is
projected to surge from 622 million in 2020 to 900 million by 2025, with groundbreaking growth of
45%. According to the report, there will be more internet users in rural India than in urban India by
2025, reducing the gap between urban and rural access to the internet. Likewise, according to data
released in 2019 by the Telecom Regulatory Authority of India (TRAI), India's telecom regulator, the
country's mobile phone subscriber base exceeds one billion. Thus, with increasing internet accessibility
and the number of smart phone users in the country, the India mobile wallet market is also anticipated
to surge in the upcoming years.

 
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Insurance Market in India

Robust Demand

The life insurance industry in India is salted to increase at a moderate CAGR of 5.3% between 2019
and 2023. India’s insurance penetration was floundering at only 4.2% of the entire population in
FY21, with life insurance penetration at a meagre 3.2% and non-life insurance penetration at a
negligible value of 1.0%. In terms of insurance density, India’s overall density stood at US$ 78 in
FY21. This is absymally low as per global average and there is massive opportunity in the
underserved heavily populated market of India.

Government Support

In September 2021, the Union Cabinet approved an investment of Rs. 6,000 crore into entities,
offering export insurance cover to facilitate additional exports worth Rs. 5.6 lakh crore over the
next five years. This not only boosts the insurance sector In February 2021, the Finance Ministry
announced to infuse Rs. 3,000 crore into state-owned general insurance companies to improve the
overall financial health of companies. Despite LIC being the single largest player in this segment,
private players occupy nearly 50% of the market, indicating confidence of the Indian citizen in the
sector.

 
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Business Model
Exponential Growth of Fintech

As illustrated through market intelligence, there is massive growth projected in the fintech space of
India, over the next decade. The increasing penetration of smartphone and internet into the
obscurities of the country as well as the push from the government to move towards digital currency
for transparency has only fueled the growth of the field.

However, one of the key issues faced by the giant fin-tech companies is user retention. Friendly
government policies have encouraged many business houses to invest in this domain and as a result,
competition has increased. Hence, the only way even established players like Paytm and Phonepe are
attracting users is by providing them with cashbacks. The users are having zero switching cost
presently and hence, they are naturally gravitating towards the wallet, which is providing them with
higher cashbacks. Higher cashbacks are affecting the financials of businesses, but the leadership
teams are unable to come out of this vicious circle.

Low Penetration of Insurance Sector

While the e-wallet user-base is set to grow multifold, the insurance penetration of India remains a
cause of worry. The worst part is that, the reason behind the low insurance penetration of India is
simply lack of awareness or financial literacy. All of us have acquaintances, who have been doing
pretty well financially, before an unforeseen health emergency, or an accidental death of the only
earning member of the family, forced them to go bankrupt. The stagnant growth forecast of the
insurance sector of India, only reaffirms the disinclination of majority of the Indian citizens to
secure the financial future.

Business Opportunity

iSeg plans to create its business model by linking the exponential growth of the e-wallet sector with
the relatively stagnant growth of the insurance sector. iSeg intends to disrupt the fintech industry, by
completely moving away from the cashback-based model and creating a model that retains users for

 
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the long term. Instead of cashbacks, the users will be provided insurance policies of varied nature as
a complimentary benefit of using the iSeg e-wallet. Scope can range from term insurance to medical
insurance to car insurance and various others. This will retain users for the long term, as insurance
policies will typically be annual in nature, resulting in higher switching cost, in case the user shifts to
a cash-back based wallet.

Business Model of iSeg

Key Partners Key Activities Value Customer Market
Proposition Relationships Segment
 Banks with   Enable secure 
Escrow Service  transfer of funds.   iSeg e‐wallet   Customer   Entire User 
 Insurance Policy   Seamless  Service Center  base of e‐
Facilitators   Cyber Security & 
Financial   iSeg e‐wallet  wallet 
 E‐commerce  Fraud Protection
Platforms  Transaction  platform   User base of 
 Movie Theatre  Key Resources with Partners  Channels mobile phone 
 Hotel and 
 Complimentary  & Internet 
Restaurant   RBI License   iSeg Website 
Chains  Insurance   User‐base of 
 Technology   Client Site 
Policies  insurance 
Platform   Insurance 
aware people  
 Collaboration  policy provider 
website 
 Vendor 
Website 

Cost Structure Revenue Structure

 Platform Development & Maintenance   Commission from Transaction 
 Customer Acquisition   Commission from Insurance Providers 
 Customer Retention   Escrow Account

 
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Plan of Action for next 14 Days

 SWOT Analysis of iSeg

 In-Depth Research about e-wallet market segment of India
 Competitor Analysis across Demographics

Group Details

Section – D
Group – D2
Sr.  Name  Roll No. 
No. 
1  Alomoy Banerjee  EPGP‐13D‐007 
2  Anupam Biswas  EPGP‐13D‐013 
3  Amlan Kusum Bhaumik  EPGP‐13D‐008 
4  Kirubhakaran R  EPGP‐13D‐049 
5  Manoj sai Bharath Gangisetty  EPGP‐13D‐062 
6  Pradyot Narayan Sikdar  EPGP‐13D‐075 
7  Praveen Kumar Dasari  EPGP‐13D‐026