The role of mobile payment technologies in era of demonitization by Mahindra Comviva

The role of mobile payment technologies in era of demonetization

ÂŠ Copyright Comviva Technologies Limited. 2017

Impact of demonetization  Demonetization will have significant impact across various factors in India.  Business structures will change because with demonetization, India is making the move from a cash based economy to a cashless economy.  GDP and tax collection will rise significantly due to increase in tax collections.  Government will increase spending in essential sectors, thus increasing the standard of living of the under-privileged.

Mobile Payment Service Providers – the gainers in demonetization • Demonetization, gave fuel to mobile ecosystems. • Mobile payments were the saviour in the time when citizens found themselves paralyzed without any cash in hand and ATMs ran without cash. • Mobile payment or mobile wallets are digital wallets, supporting a wide range of payment option so that consumers can make purchases and transfers easily. • During the time of demonetization, mobile payment witnessed a un-parallel spurt in usage, which reached as high as a 435% rise. • Mobile payment solutions are the right vehicle for a smooth transition from a cash based economy to an app based economy. • It matches with the wider goal of India of becoming a digitized country. • Mobile wallet users can transact instantly for purchases, transfers, etc. making transactions extremely easy. • Users do not need to stand in long queues in cash counters and ATMs, a convenience appreciated by customers and businesses alike. © Copyright Comviva Technologies Limited. 2017

Mobile Payment Service Providers – the gainers in demonetization •

Mobile wallets has led to a reform in the banking sector as well, leading to a record increase in digital transactions.

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Needless to say, now banks can save on manpower for handling cash due to a reduction in footfall in bank branches.

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Businesses benefit as well, since the risk of handling cash is minimized, thanks to mobile wallets.

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Mobile payment companies have capitalized the demonetization drive successfully.

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They have invested millions to ensure their operations and platforms are accessible from anywhere. Thus, from autorickshaws to street vendors, everyone has used mobile wallets successfully.

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UPI is going to be a game changer in the coming years. It is the payment process by which mobile wallet customers can transfer money from their bank accounts to merchants and also receive payments without disclosing banking information.

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Seamless and low transaction times are the main reasons why UPI is gaining popularity day by day. Soon, UPI will extend to merchant transactions as well.

Some interesting facts  Paytm has registered 32.5 lakh transactions every day in the mobile wallet segment alone.  If we consider non-wallets transactions as well, the total number of transactions will be more than 50lakhs amounting to more than Rs 100 crore a day.  Transactions on FreeCharge rose by nine times and MobiKwik rose by 18 times post demonetization.  The mobile wallet provider Oxygen Services registered transactions worth Rs 600 Crore in November 2016 alone \ compared to Rs 450 Crore a month in the previous month. Most of these transactions were peer to peer payments.  As discussed above, UPI is about to be a game changer in the mobile payment technology stage.  Currently, 28 banks participate in UPI, which is going to increase in the coming days.  As per RBI data before demonetization, the number of POS machines at merchant locations was approximately 1,461,672.  Post demonetization, this number has increased manifold, in some cases, as high as 500%.

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