Mobile payment systems – The most efficient way to embrace cashless economy in India

I am taking time to write this article on Mobile payments after 3 years, post my graduation from GGSB. I had written a 60 page thesis on Mobile payments and its need in the Indian market and the way mobile phones are under-utilised in the Indian market, however this idea was considered to be ahead of time for India 3 years ago but today it seems to be a very practical solution.

The objective of my thesis was to understand the factors that would really influence customer experience on using Mobile payments and was trying to explore the factors affecting the adoption of Mobile payments within the country.

In 2013-2014, this was still considered as anon-particle solution, or a pre mature idea for cashless payments, due to many factors such as follows

1.    A very low internet penetration

2.    Lack of belief due to security issues

3.    The fear among the middle class merchants to adopt new technologies due to lack of education

While we are progressing to the year 2017, with new actions taken by the Modiji’s BJP government, there is great sense of positivity in India to embrace the new currency and to curb corruption by driving cash exchange schemes which is a great step towards better India.

 More can be done to decrease pure cash based economy by bringing a convenient method for performing transactions by really adapting new methods of payments among the small and medium sized business, this is exactly where the Mobile payments strategy should fit in today.

Why do I see mobile payments as a more practical solution today?

1.    Increase in Internet penetration: As the Internet penetration has grown up to 35% today from 11% in 2011 and expected to exceed 50% in the next 3 years, I believe this provides great leverage to adopt mobile payments today.

2.   Mobile agenda has been a key factor in empowering the consumer and disrupting every industry: Mobile strategyis embraced by many industries such as retail, transportation, media etc. to survive, compete and reach out to their customers in a much more faster way than ever.  

3.   Increase in smartphones:  India is one of the largest markets for smartphone industry and with new companies releasing affordable smartphones, the growing Indian middle class is only gaining advantage as it is now open to gain access to information at better speed.

4.   Release of better-packaged offering from telecom providers: With companies such as Reliance, with its Jio telecom brand disrupting the telecom industry by providing Internet almost for free enabling a larger audience to get their hands on Internet, which directly translates, to Information.  

5.   More than 80% of Internet users today connecting through mobile phones: This is a great indicator of market readiness, it clearly shows that people will be able to adapt to a payment systems through mobile phones.

I had the opportunity to live and work in Shanghai, China for 1.5 years, and my experience with mobile payments in this part of the world, especially in the e-commerce, retail and transportation industry makes me believe that China is a country which is far ahead of any other nation which got Mobile payments strategy right, by truly embracing digitization.

China has adapted payments through multiple mobile payments methods such as QR code payments through its favorite social messaging app Wechat and also through digital wallets, one of the famous one being Alipay wallets.  It clearly provides better customer experience and also paves way for cashless economy.

Even though the Chinese financial system is organised in a much different way when compared to the Indian financial system, from a technology point of view it certainly gives a great example for implementing and heavily embracing mobile payments in India to pave way to a sound cashless economy.

The Indian government has already taken initiatives to introduce mobile payments however the government hasn’t taken time educate the merchants or businesses to adopt it.

It is time for Indian government to take initiatives to accelerate this mode of payment, especially since we have some strong technology and service provides developing in the Indian mobile payments sector.