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
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.