One year of demonetisation: Pick, and choose, your e-wallet
ET CONTRIBUTORS|
Updated: Nov 04, 2017, 09.04 PM IST
New-age payment solutions, which have a simple interface, can play a key role in creating a constructive digital road map for the economy.
By Vinay Kalantri
India — and the world — was completely taken by surprise when Prime Minister Narendra Modi demonetised high value currency notes on November 8, 2016. Before demonetisation, over 85 per cent of transactions in India were cash-intensive.
The impact of demonetisation and the consequent invalidation of high currency notes resulted in a severe cash crunch in the economy.
With more than two-thirds of the currency taken out of circulation, there was a huge surge in non-cash payments. GoI's focus on creating a credible digital payment infrastructure put mobile wallets or e-wallets into the spotlight.
Though the easy-to-use digital payment tools had been in existence, demonetisation became the key catalyst that made the average consumer realise the convenience of using digital payments in simplifying everyday transactions.
Digital India, which placed emphasis on improved online infrastructure, has created a conducive environment for the mass use of e-wallets. A rise in mobile penetration and the roll-out of faster Internet services have the potential to encourage Indians to use digital payment tools for financial dealings.
New-age payment solutions, which have a simple interface and can easily be activated through an app, can play a key role in creating a constructive digital road map for the economy.
Mobile wallets have greatly helped consumers to channelise their savings and create a digital trail for monitoring their expenses and planning their finances.
Mobile payment platforms do not need a complicated technological infrastructure or require the user to be technically proficient. Relatively inexpensive, m-wallets can prove to be particularly helpful in times of emergencies like surgeries, when time is of crucial importance.
Money transfer is the biggest takeaway of m-wallets, and innovations in technology have fastpaced the outreach of cashless transactions to remote villages and tier-2 and tier-3 towns. E-wallets have also helped companies create loyal customer bases by keeping a track of their choices and preferences.
RBI has given a huge impetus to creating a seamless payment interface by making digital payments and receipts interoperable by April 2018.
Interoperability among KYC compliant e-wallets will widen the operational bandwidth for players in the domain and will augment the efficiencies of the system. The move is also likely to result in a broader consolidation in the online payment industry with users becoming choosy in their use of wallets.
Though the virtues of a robust digital payment ecosystem have been extolled, their widespread use may be curtailed on account of several impeding factors. Internet connectivity remains a major issue.
A major part of India's population lacks access to the Internet and this crucial consumer segment remains out of reach for mobile wallet companies.
Improving footfalls in rural areas also remains a key challenge area for the digital payments industry. Around 93 per cent of rural consumers have not been digitally active and still pay only by cash. Steps need to be taken to increase Internet bandwidth in rural areas and incentivise the rural population to execute transactions through online payment platforms.
The options are still fraught with security vulnerabilities and data thefts. In case mobile wallet companies do not deploy strong mechanisms, critical consumer information on mobile wallet platforms remains prone to hacking and the illegal obtainment of data can be used to execute fraudulent transactions.
Mobile wallets have recognised the need to plug this key security lacuna and are implementing robust anti-piracy measures and data protection programmes.
Demonetisation should be viewed as a stepping stone to creating a robust digital road map and speeding economic reforms. Digitisation of the economy, and the increased use of online payment tools like e-wallets, has the potential to give a booster shot to the economy.
The writer is MD, The Mobile Wallet (TMW)
India — and the world — was completely taken by surprise when Prime Minister Narendra Modi demonetised high value currency notes on November 8, 2016. Before demonetisation, over 85 per cent of transactions in India were cash-intensive.
The impact of demonetisation and the consequent invalidation of high currency notes resulted in a severe cash crunch in the economy.
With more than two-thirds of the currency taken out of circulation, there was a huge surge in non-cash payments. GoI's focus on creating a credible digital payment infrastructure put mobile wallets or e-wallets into the spotlight.
Though the easy-to-use digital payment tools had been in existence, demonetisation became the key catalyst that made the average consumer realise the convenience of using digital payments in simplifying everyday transactions.
Digital India, which placed emphasis on improved online infrastructure, has created a conducive environment for the mass use of e-wallets. A rise in mobile penetration and the roll-out of faster Internet services have the potential to encourage Indians to use digital payment tools for financial dealings.
New-age payment solutions, which have a simple interface and can easily be activated through an app, can play a key role in creating a constructive digital road map for the economy.
Mobile wallets have greatly helped consumers to channelise their savings and create a digital trail for monitoring their expenses and planning their finances.
Mobile payment platforms do not need a complicated technological infrastructure or require the user to be technically proficient. Relatively inexpensive, m-wallets can prove to be particularly helpful in times of emergencies like surgeries, when time is of crucial importance.
Money transfer is the biggest takeaway of m-wallets, and innovations in technology have fastpaced the outreach of cashless transactions to remote villages and tier-2 and tier-3 towns. E-wallets have also helped companies create loyal customer bases by keeping a track of their choices and preferences.
RBI has given a huge impetus to creating a seamless payment interface by making digital payments and receipts interoperable by April 2018.
Interoperability among KYC compliant e-wallets will widen the operational bandwidth for players in the domain and will augment the efficiencies of the system. The move is also likely to result in a broader consolidation in the online payment industry with users becoming choosy in their use of wallets.
Though the virtues of a robust digital payment ecosystem have been extolled, their widespread use may be curtailed on account of several impeding factors. Internet connectivity remains a major issue.
A major part of India's population lacks access to the Internet and this crucial consumer segment remains out of reach for mobile wallet companies.
Improving footfalls in rural areas also remains a key challenge area for the digital payments industry. Around 93 per cent of rural consumers have not been digitally active and still pay only by cash. Steps need to be taken to increase Internet bandwidth in rural areas and incentivise the rural population to execute transactions through online payment platforms.
The options are still fraught with security vulnerabilities and data thefts. In case mobile wallet companies do not deploy strong mechanisms, critical consumer information on mobile wallet platforms remains prone to hacking and the illegal obtainment of data can be used to execute fraudulent transactions.
Mobile wallets have recognised the need to plug this key security lacuna and are implementing robust anti-piracy measures and data protection programmes.
Demonetisation should be viewed as a stepping stone to creating a robust digital road map and speeding economic reforms. Digitisation of the economy, and the increased use of online payment tools like e-wallets, has the potential to give a booster shot to the economy.
The writer is MD, The Mobile Wallet (TMW)
