Mobile payments ecosystem comes of age in India

Although being young with only a dozen mobile wallet players in the field, India's mobile payment ecosystem has witnessed steady growth and a rapid adoption of path-breaking innovations as people started realising the benefits of technology in online payments space in 2015 -- the most popular being the "mobile wallet".

Major economies across the world have been witnessing "cashless" transactions, with the industry, estimated to be around $300 billion in 2013, making inroads in many countries in the last five years. Companies such as Apple, Alipay, Google's Android Pay and Samsung Pay have already put their own solutions in place.

In India, there are around 12 mobile wallet players that include Paytm, MobiKwik, Oxigen, Citrus Pay, Freecharge, Zaakpay, ItzCash, Airtel Money, M-Pesa, and mRupee, and their combined customer base is said to be more than 125 million. Of this, Paytm alone has a lion's share of over 50 million.

According to a study by research and consultancy firm RNCOS, the current size of the mobile wallet market in India stands at about $53 million (350 crore Indian rupees) and is estimated to touch around $183 million (1,210 crore Indian rupees) by 2019. Cash transactions account for 38 percent, while recharge and bill payments account for 30 percent of the total market.

However, there are minor irritants such as failed transactions forcing the online shoppers to go through the tedious process of filling in details, and the lack of awareness among people. But leading payment gateway company PayUbiz has launched a new feature called Magic Retry, which enables the consumers to retry a failed transaction by simply picking up from the point where the last error message appeared.

Magic Retry is specifically designed for mobile online payment and is said to be first of its kind in the digital and electronic payments ecosystem in the country.

Head of Business at PayUbiz Rahul Kothari said that though most of the online shopping was taking place over mobile devices, online transactions through mobile phones were still susceptible to payment failure due to network signal loss or a random error. "With the launch of our new feature, the usual hassles which have been traditionally associated with mobile payments are things of past," he added.

Co-founder & CEO of Eko Financial Services Abhishek Sinha said that the time is ripe for the growth of fintech in the country and the government has created the right environment with the Indian Central Bank (Reserve Bank of India) issuing over 20 banking licences, including ones for payment banks and small finance banks; Immediate Payments System (IMPS) has emerged as a preferred choice for inter-bank transfers over NEFT.

The National Payment Corporation of India (NCPI), an umbrella organisation for all retail payments in the country, will launch Unified Payment Interface (UPI) shortly to enable P2P payments. "This is significant as it will allow for eKYC and authentication almost on a real-time basis. Over 190 million Pradhan Mantri Jan Dhan Yojna (PMJDY) accounts have been opened for the poor people and the social monetary benefits will be directly transferred into their accounts soon," he said.

Sinha said that the smartphone as a platform was getting all of this together, especially for payments and credit where the digital footprint generated by the customers has emerged as a mechanism for designing products and monetisation.

India will see the emergence of 300-400 million new customers who will have smartphones and bank accounts, regular Direct Benefit Transfer flows in their accounts, and an Aadhaar card in the coming months.

These new customers will be looking for payment instruments to participate in commerce and their expectations will very different from the current structures and offerings. Merchants are also increasingly engaging with customers on new platforms, including social media, in an attempt to take the experience to a higher level.

"With all these developments, payment companies will look forward to completely unbundling the payment instruments architecture and creating on-the-fly configurable and dynamic instruments for customers, especially across credit, loyalty, payment method, authentication, and identity," Sinha said.