Quietly, there has been a major revolution afoot across India, one that does not get talked about as much as it should be. And this is the mobile payments revolution. What started a few years back as a convenience people turned to when they had to quickly add a Rs 10 recharge on their pre-paid phone, has now spawned into an economy of its own. India was willing to take the risk of mobile payments with Rs 10 and gradually this has helped the recharge companies garner trust and huge user bases. So much so that this confidence is now good enough for Indians to use these services to pay for anything from taxi rides to real estate bookings.
Credit card penetration in India is still quite low and continues to find resistance, but mobile wallets are slowly starting to fill this gap with widespread acceptability. While most of India might not have a credit card to turn to when they want to create a new Apple ID, they have no issues buying a new song or game from using these wallets. It is a surprise that these payment options have not found native adoption on Google’s Android or Apple’s iOS for Indian users, but app developers have been wiser and are already tapping into this new no-cash economy. Taxi apps might be the one sector that makes the best use of a PayTM or MobiKwik recharge, but it is when you queue up to enter a movie that you see the sheer number of people showing their phones for scanning instead of presenting a ticket. This is the trickle down effect.
The sheer number of users most of the top Indian mobile payment companies are now talking about is staggering. PayTM, for instance, claims over 100 million users, almost half the numbers of global net payment giant PayPal. We are nowhere near the penetration mobile payments have in Kenya for instance, but given the size of our population and economy the numbers we have are significant too.
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And there is some very Indian innovation happening around very Indian problems. It took me a while to understand the concept and I am still not sure it will work, but PaySe is interesting nonetheless. Ashutosh Pande, Founder and Chief Innovation Officer of PaySe calls his product digital cash, though it is not cash and it is not entirely virtual. “It retains the attributes of cash – offline, peer to peer and secure. PaySe utilises the latest advances in mobility, big data, open source and crypto tokenisation to deliver the world’s first secure offline peer-to-peer payment solution,” he explains. In simple words, the company offers a PurSe mobile wallet, slightly bigger than a credit card and smaller than a purse, to carry the digital cash offline, so that when a person withdraws PaySe digital cash is transferred into their PurSe. “They can use PaySe like cash or get it converted to cash. Any transaction where money is leaving the PurSe requires the user to enter a four digit code to make a successful transaction,” explains Pande, who foresees banks, microfinance institutes, payment banks, small finance banks and e-commerce companies become part of the platform.
Trying to offer a more secure, unhackable, solution in comparison to the mobile phone, Pande says PaySe is working on a slim SIM based solution where the secure memory is provided in a stick ON base that can be pasted onto the SIM card of a phone and the phone accessory called the PurSe. He says the bait for merchants to come on board will be the fact that there is no delay in crediting payments and there is no Merchant Discount Rate, which at almost 2.5 per cent could be almost half his margin for some transactions. “The merchant realises the complete value of the transaction immediately. The funds are immediately accessible to the merchant; there is no dispute and no delayed credit,” he explains.
While it will be tough for a new platform and stream of thought to get wide currency in a market like India, this is certainly the kind of innovative thinking that will help India leapfrog the entire credit card gap in our economy. Also, the segment is now clearly moving beyond micro-payments and transaction of up to Rs 1,00,000 can now be cleared if the users has got his KYC done. This, coupled with EMIs options in the segment, could be what makes this ideal payment solution for India.