Digital payments in India: Miles to go, before they sleep!

“Wit is the sudden marriage of ideas which, before their union, were not perceived to have any relation,” said the famous American writer, Mark Twain. And I could not help relating the current demonetization scenario to this. Two months ago, with no prior warning (or even indication), we saw Rs 500 and Rs 1,000 banknotes hold no value in the market. A wit driven towards curbing black money and corruption ruptured the most liquid asset: cash. But this move has inked another chapter in the Indian economy structure: mobile wallets. Now let me tell you, the concept (and fascination) of digital payments through mobile wallets was not completely unknown to me. I had got my hands on both Paytm and Freecharge during my college days, much before demonetization befell us, but the experience then was not as gratifying. I still remember making a dozen calls to Paytm’s customer care department as a recharge that I had made did not reflect in my wallet. Phew! And this one experience was enough for me to get away from the fascination and with no high regard of this payment mode. Now that was opinion more than a year ago. And today, I am compelled to think and believe otherwise!

Mobile Wallets are here to stay

A mushrooming middle class, an economy which leans largely on disposable income, a voluminous growth in low-cost smartphones coupled with the availability of high speed internet — what else can mobile wallets startups ask for? On November 9, within 24 hours of the landmark announcement, Paytm published a blog post titled “Just another day at Paytm”. And then it was just a matter of time for the Noida-based startup to pave its way into millions of mobile devices. Reports suggest that in two weeks after that blog post, Paytm observed 7 million transactions in a day, which was way beyond the number of credit and debit card transactions that are done in India. Now with developments like Paytm partnering with more than 41,000 petrol pumps across India, and the company turning its focus on a payments bank, the payments startup has spiraled up to become a household name as India. Looks like Vijay Shekhar Sharma is the biggest beneficiary of the demonetization business.

Are people suffering?

A lot of questions have been posed regarding the accessibility and ease of using mobile wallets. What about people who do not own a smartphone? In a country where many individuals and even households do have a single bank account, how can e-payment emerge as a reliable option? I do agree with such concerns and believe that convenience of a few should not lead to deprivation of many. While on one hand, people have been frustrated and outraged about the jerky performance of e-wallets owing to “heavy server load”, many others continue to remain unknown to this new breeze. Can this be accounted solely to a lack of sufficient infrastructure? I don’t think so. The real problem is that there are not many avenues of usage. The number of merchants who allow the use of mobile wallets is limited. When I see tea stalls and small grocery shops using Paytm, but an Ola cab driver (some of them) asking me to pay with cash, I confront something more than inconvenience: Lack of Uniformity. Cash still remains to be the popular choice for small retailers as the point of sale systems are expensive and cumbersome. This limits their ability to accept digital payments especially through wallets. Hence mobile as a point of sale (PoS), point of purchase and point of acceptance bears the potential to lessen the digital divide between urban and rural India, along with drawing the masses into the net of financial inclusion. Now that digital money has emerged as the biggest alternative for cash, the need for standardization and uniformity needs to be realized. And this cannot be met by introducing another ban, or coercive means, but improving the ease of access and understandability. Big retailers need to be the trend setters and adopt the different ways of digital transformation, in this case, mobile wallets – because they have the resources to do so. A successful implementation will create a demand, and the demand would lead to infrastructure development. Isn’t this how smartphones got popular?

Time to Buckle Up!

So far, digital disconnect has stood as the major reason behind heavy dependency on cash instead of making use of bank transactions and plastic money. But with demonetization in effect, and the Digital India campaign running parallel, a paradigm shift is inevitable. According to economists, by not integrating the Indian economy with digital media, India will lose the opportunity to save close to 2% of the GDP, which is around Rs 2,15,000 crore. Now this is too big a loss to incur, isn’t it? So what’s the solution? Go Digital. India is poised to witness a major revamp of its economy by overcoming the current loopholes in the financial system and channeling the money market through better organized mediums. And as the smartphone and mobile internet penetration in India increases, so will the adoption of wallets. With the stakes being so high, it only makes sense that we buckle up for the digital journey that lies ahead. Views are of the author and Techseen may not necessarily subscribe to them

Abhinav Mohapatra

An author who has a keen interest for the ‘off-beat’ <!--more-->An author who has a keen interest for the ‘off-beat’, he has covered and explored multiple facets of the marketing, advertising

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