Who had anticipated that the mobile payment sector will become so prominent in the year 2015? Once a small, quiet corner of the financial world is now initiating to take a roller-coaster ride. Despite the data breaches taking place now and then; there have been unexpected innovative development resulting in the wide acceptance of mobile payments. The recent changes have made mobile money appear more promising than ever before.
A simple fact that has come forward in 2015, following the many failures and success of mobile payments is that one common mobile financial solution won’t cater to all the markets. How can it? After all, the mobile financial space is so vast within itself- we have payments, payment-related services along with commerce. The various classifications would obviously demand their respective solutions which would of course be required to be customized for each market.
Mobile payments in India
Be it the availability of multiple mobile payment options or just their acceptability by the merchants, 2015 has witnessed an exponential rise in the graph. The mobile wallets are still at a nascent stage but their acceptability has become wider today and above all, they are growing at a phenomenal pace.
The mobile phone usage patterns are changing inevitably and finally, we can anticipate the users getting acquainted and comfortable completing payments via mobile devices. Backed by the set in comfort level, a mobile phone transforming into a payment means is just natural and will be a gradual process. Over all the number of people transacting using mobile phones can be seen only growing by the day.
Reports earlier this year suggested that mobile payments worldwide will account for 1 trillion USD by the year 2017- which sums to 124% growth from 500 billion USD by the end of 2015. The Asia-Pacific markets are being anticipated to contribute significantly to this growth as m-commerce transaction featuring remote payments are taking off across the region.
The MasterCard Online Survey revealed in March 2015 that India has got a rising number of smartphone shoppers. The purchases made over mobile have nearly doubled over the last 2 years. Prominently, the mobile wallets have got themselves listed among the contributed in the enrichment of Indian shopping experience.
In terms of number of users, the mobile wallets have already surpassed credit cards. The drastic shift in the consumer behavior fosters the belief that mobile wallets will not only transform payments by also commerce.
What made things change for mobile payments?
There are a number of factors that can be attributed for the gradual change in mobile payment scenario. The most obvious yet the most important factor among them is the massive penetration of mobile and internet. It is quite a surprising fact that the country has 240 million bank accounts but 500 million mobile phone users. To add to the surprise, around 90% of these mobile phone users are capable of handling online financial transactions.
Prepaid mobile recharges and easy bill payments stay at forefront when it arrives to driving the number of digital wallet accounts. During 2014-15, the major driving factors for the mobile wallet market included money transfer, utility application and bill payments among others. These applications are being predominantly used in the Tier-I cities of the country.
The growth can be attributed majorly to the provided convenience and security. The mobile wallets simplify the online payment process with one-click transfers. Arriving to security, it can be said that the independence of deciding the amount one needs to have in his wallet makes mobile money safer that the online payments made through cards. Yes, it can be said so owing to the fact that even if someone manages to hack into one’s mobile wallet account, only the deposited amount will be at risk rather than his complete savings lying in his bank account.
Framework for mobile wallets
Following decades taken to shift from paper to plastic money, the Reserve Bank of India has been rather faster in extending support to mobile money by making amendments. Resultantly, almost all the major banks have put forward their mobile wallets such as SBI Buddy from State bank of India and Pockets from ICICI.
Putting frameworks in place RBI’s latest announcement will facilitate money transfer between online wallets by the next year. India’s central banking institution seems to be all set for driving digital transactions. RBI’s regulatory frameworks are protective in order to support the adoption of mobile wallet payments as the users need to be confident that appropriate steps are taken to maintain confidentiality for their account details and protect their funds.