UPI Apps a Big Blow to Mobile Wallets like Paytm in India

The Narendra Modi led Government of India is serious on pushing forward Digital Money and Cashless society, albeit in their own way. They have launched the famous BHIM UPI Mobile Payment App which forced every other Mobile banking App to refresh with the UPI Interface for instant mobile money transfer.

Mobile Messaging Platform, WhatsApp has selectively leaked that it is also embracing the NPCI’s Unified Payment Interface to facilitate P2P Money Transfer connected to consumers bank accounts. Thus, the protocol chosen by a giant like WhatsApp could potentially tilt the balance towards a leader. As per this piece Whatsapp’s primary choice

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Adoption of Mobile Money in Cashless India

The Indian Internet ecosystem had its challenges in 2016, parts of fintech has seen continued strong momentum. The number and value of transactions through mobile wallets have been growing at over 30% and 100%, respectively, and the mobile banking transactions, in volume and value, have grown at over 150% and 250%, respectively (for the period April-October 2016). The number of wallet users has already surpassed the number online banking users.

The demonetisation exercise has also helped these companies further, notably Paytm (the impact is not reflected in the numbers discussed above). It is yet to be seen

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Why Consumers Spend More in Cashless Transactions ?

consumer-spending-indiaAcademic research indicates that digital mediums (credit/debit cards, digital wallets, etc.,) do not have cash outflow vividness, and hence reduce the pain of payment during a transaction in comparison to cash. As pain of payment reduces, spending propensity increases. Also, when using these mediums, people are more likely to underestimate or forget the amount spent on recent purchases; the lack of saliency for these mediums leads buyers to believe that they have more liquidity than they actually do, and this increases the purchasing probability of additional products (even non-essential ones).

Research also indicates that

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Demonetization Effect – New Payment Platforms Grows

india-payment-platformsWith the boldest move in the History of India, The Demonetisation of Rs 500 and Rs 1,000, the nation continues to see a gradual shift towards newer payment platforms which should help India move towards a less cash economy. Higher tax compliance as well as lower costs have the potential to accelerate this change, especially post demonetization, but we would watch the pace of change for a few more quarters.

With 200,000 ATMs and 1.4 million POS machines, Indian banks seem to getting an unexpected benefit coming through demonetization as the bulk of 711 million debit cards and

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Why Credit Cards Still Offer Promise Despite Modi’s Digital Hype ?

Credit Cards vs Digital WalletsIn an era of Modi Government’s Digital India, new companies are unable to offer any new service but are looking to make it simpler and importantly, more relevant for consumers as the broad perception is that banking is a relatively complex business and the user experience/interface is far from satisfactory. Banks are defending their business as they have better data of their consumer, brand or customer trust and a large distribution network.

Digital acceptance of payment is not too high as >90% of transactions still move by cash. The extinction of the credit card business is unlikely in the medium term. The value proposition of the card would still be appealing to the consumer, especially

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Is Apple Pay a Threat to VISA ?

Apple Pay Threat on VISASilicon Valley innovator Apple Inc has unveiled Apple Pay electronic Payment Platforms using SmartPhones and NFC threatening older and established players like VISA and MasterCard. We analyzed on if it will be a threat in disrupting the card payment industry and here is our finding. Unlike PayPal, Apple Pay is not a P2P Payment mechanism.

One must appreciate how critical the payment networks(VISA) are in facilitating Apple Pay and how tokenization furthers the importance of the networks in

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