On account of digital and technology revolution, led by penetration of smart phone and internet on mobile, the payments landscape is going to transform in India. Entries of several non- banking institutions, such as Paytm, M- pesa, Mobwick etc. are offering payment services and solutions. Traditional cash based economy shifting towards cards based and mobile transactions. Customers are now becoming more demanding and expect instantaneous and one touch payment solution. In spite of that the value of physical currency in circulation in India is one of the highest among other emerging countries.
In such case mobiles offer a low-cost mode to create financial access and payments. It can extend the last-mile reach of banking services either through business correspondents or directly to the end customers. Enhancement of telecom infrastructure, accessibility of internet services and low-cost smartphones eliminating the need for hardware based on fixed line connections. Mobile is a platform that enables a unique combines digital identity, digital value and digital authentication to access to financial services at low cost — for instance, OTP-based authentication for Aadhaar-linked bank accounts and biometric authentication for processing transactions.
The flexibility to adopt digital technologies in payment segment as varied as USSD and magnetic secure transmission makes it capable of meeting the future needs of customers, merchants and service providers. Since the value itself is digital, exchange of value across various form factors of mobile payments is easy, resulting in an able to exchange information on its platform that works on a lowest common denominator. Consumers have options to use various factors for mobile payments: one set of consumers may choose carrier billing, while another can use mobile-based credits that are delivered to their wallet.
Indira School of Business Studies, Pune