Ravi Jagannathan, Managing Director & CEO, Y-Cash Software Solutions | Tuesday, 17 June 2014, 09:59 IST

Founded in 2011, Y-Cash Software Solutions is a provider of payment solutions using mobile technology, as a RBI Authorized Mobile Pre-Paid Wallet issuer.


Mobility in India – An evolving landscape

Globally, when almost every second person had access to telephone, less than 5 percent of the Indian population had access to telephone. But when communication technology advanced, India crossed the copper wires and the adoption of mobile phones leapfrogged, making India the frontrunner in the list of mobile density countries. Non-cash payment situation is similar to telecommunication adoption; a large portion of the day to day transactions in 1.2 billion populated India are done using “cash” which is in stark contrast to other developing and developed nations.


Similar to the telecom industry, the shift in adoption of non-cash payment is obvious in India but delayed though. Having said that, made for India innovative solutions, regulator's support, growing youth population, inflation that lead to a need for carrying higher denominations of cash and others are clear indications of India's mobile payment to grow leaps and bound to make India as a cash lite economy.


In this modern era, mobile has become the fourth basic necessity after food, clothing and shelter. In the recent past, the usage of a mobile device has gone beyond its basic purpose of talking and messaging. Using the mobile for making a payment has no barriers but changing the behavior of the users takes some time.  Reserve Bank of India's report says that annually over Rs.80 billion worth of transactions are already happening via a mobile. The user is comfortable when the cash stored is managed through an App that is totally under the user's control. There are over a dozen active mobile wallet providers in India - Airtel Money, ItzCash, Money on Mobile, Paytm, Ypaycash to name a few. With already existing payment networks that have great penetration throughout India, the mobile payment ecosystem in India is one that could accommodate major growth in the next year or so. 


Mobile Money acceptance - Poised to surge

India is a country with a majority of working class citizens who would gladly welcome a mode of payment that takes lesser time, is safe and convenient, and doesn’t require them to stand in queues to access their cash reserves. Mobile payments offer many benefits that make them viable to a majority of the Indian population. One of the key reasons for India still being a cash economy is lack of enough Point Of Sale devices at the retail merchant shops to accept credit or debit cards. Reported number of card accepting POS points in India is about a million which is much lower as compared to other nations of similar growth. The number of POS points should be over 3 million to make India a true cash-lite economy. Conventional POS devices are hardware based and given the efforts required to achieve the 3 million growth, it requires over 10 million man days which is humanly not possible. Thus adoption of Mobile POS comes in handy to achieve this. Availability of mobile wallet to pay all kinds of payments say, at retail store as well for online payments will make it attractive proposition for the consumers who can do away with carrying multiple cards, cash and others. The question is how long it’s going to take for all the retailers and online merchants to accept mobile payments. With liberalization of regulations relating to mobile wallet, the growth of mobile payment in India is already on the rise and the online services such as air time top-up, utility payments, money transfers etc are already actively transacted in mobile. Once the retailers start adopting the Mobile POS for accepting cash through mobile wallet the growth of Mobile Payments will reach its height. Mobile POS adoption is in its early stages and we can expect this to mature over the next couple of years. 


Potential wallet users:

The young urban Indian population consists mainly of hard-working individuals, who would readily entertain the ability to make payments such as utility bills, ticket reservations, food and beverage bills, and more, with the help of their mobile devices. Furthermore, a considerable number of migrant workers in Indian cities would definitely find it useful to easily transfer money to their families in small towns and villages, directly from their mobile phones. While almost every one of them owns a mobile phone this category forms part of 41 percent unbanked population of India. Mobile Wallet solutions come handy to this set of population to enjoy the convenient of technology based and secured payments without any need to have bank accounts.


Mobile Wallet Payments – Safety

Payments made from a Mobile Wallet are much safer and secure as compared to payments made from a web browser. Mobile Wallets are not vulnerable to any malware or virus and there is no need for exposing personal credentials such as card details and identity. 


Since mobile payments offer a greater degree of convenience and efficiency over other modes of payments, the network of merchants and consumers who are adopting this mode is always on the increase. The fact that the required infrastructure for mobile payments is already well-established makes it very easy for both consumers and merchants to adopt and operate on this new domain.


Technological endeavors are well under-way that are all set to make mobile payments much safer and effective. Near Field Communication technology though holds promise for the growth of mobile payments its long way to go as the NFC ecosystem is not yet present in India. There are mobile applications that use encrypted QR code to transmit sensitive payment data anonymously. Such payment eco-systems will grow in the times to come as it gives a lot of comfort and security to the users. Users are constantly looking for options where payments can be made conveniently without sharing a lot of personal information as is the case today with credit/ debit cards swipes & net banking.


Mobile Payments is the Future

In an age where time is essentially money, it isn’t right to squander time and efforts to pay utility bills, insurance premiums, and others. Mobile payments offer the perfect payment solution to all boxes of the modern-day life. With mobile technologies evolving, and mobile usage increasing as we speak, mobile payments are definitely going to be the all-inclusive payment mode in the not-so-distant future. The mobile device as an instrument for making payments will mature over the next couple of years and will stay forever.

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