Mo­bile Pay­ments to Over­take Phys­i­cal Card Spends in 2017

Semi-ur­ban and ru­ral mar­kets in In­dia may skip the ‘card’ era and leapfrog di­rectly into ‘mo­bile pay­ments’ era

The Economic Times - - Companies & Economy - Ni­harika.Banerjee @times­group.com

Mumbai: Mo­bile and dig­i­tal pay­ments will over­take phys­i­cal card pay­ments as the pre­dom­i­nant non­cash pay­ment mode in In­dia in 2017, driven by de­mon­eti­sa­tion. The pos­si­bil­ity has been ex­pressed by Deloitte In­dia in its re­port ti­tled ‘Tech­nol­ogy, Me­dia and Telecom­mu­ni­ca­tions (TMT) Pre­dic­tions 2017’.

“De­mon­eti­sa­tion has forced a be­havioural change in the In­dian con­sumer. While FinTechs used the ‘car­rot’ ap­proach to en­tice cus­tomers to switch be­hav­iour and adopt dig­i­tal pay­ments, de­mon­eti­sa­tion em­ploys a more dra­co­nian ‘stick’ ap­proach, which may prove to be more ef­fec­tive,” the re­port, which was made avail­able to ET, said.

“De­mon­eti­sa­tion may well be the cat­a­lyst that sees semi-ur­ban and ru­ral mar­kets in In­dia skip the ‘card’ era and leapfrog di­rectly to ‘mo­bile pay­ments’ era,” the re­port added. The firm's re­search also found that 43% of adult smart­phone users in de­vel­oped mar­kets use their phones to check their bank ac­counts.

The re­port said mo­bile-based dig­i­tal au­then­ti­ca­tion and iden­tity, which is now gain­ing pop­u­lar­ity as “GSMA Mo­bile Con­nect”, can help ad­dress the is­sue of mul­ti­ple lo­gin IDs and pass­words. “Mo­bile Con­nect sup­ports var­i­ous level of au­then­ti­ca­tion meth­ods in­clud­ing bio­met­ric. When used in con­junc­tion with Aad­haar, it can ad­dress all lev­els of au­then­ti­ca­tion,” it said.

The re­port fur­ther said tel­cos in 2017 will de­sign dig­i­tal trans­for­ma­tional pro­grammes to en­hance cus­tomer ex­pe­ri­ence through more dig­i­tal in­ter­ac­tion points with a fo­cus on cus­tomer ac­qui­si­tion, re­la­tion­ship, and value man­age­ment. The Deloitte TMT re­port added that tele­com op­er­a­tors would un­veil new In­ter­net of Things (IoT) strate­gies or stretch the ex­ist­ing one to have higher level of par­tic­i­pa­tion in the over­all end-to-end IoT ecosys­tem. It said that a cou­ple of “lead­ing op­er­a­tors” would make sig­nif­i­cant in­vest­ments to ex­tend their IoT ca­pa­bil­i­ties.

“Though ini­tial fo­cus would be on pro­vid­ing SIMs for IoT de­vices and so­lu­tions, which in 2017 is ex­pected to take off, lead­ing to over a bil­lion ad­di­tional SIM sales in the next three years,” the study said.

The study high­lighted that In­dia would be a rapidly grow­ing hub for IoT so­lu­tions with mar­ket value ex­pected to be $9 bil­lion, with an in­stalled unit base of 1.9 bil­lion by 2020. In­dia IoT op­por­tu­nity is ex­pected to grow al­most 7 times to move from $1.3 bil­lion in 2016 to $9 bil­lion by 2020.

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