Enthused by the rising number of Indians sporting mobile phones, electronic payment companies are vying to make them swap their purses for a mobile wallet.
These companies, which offer a range of solutions for mobile users to recharge prepaid connections, buy tickets and transfer money to friends and family, are sprucing up their offerings in a bid to get a bigger share of this growing market.
Firms such as Citrus Pay, Paytm and Oxigen are now offering innovative services including storing personal information to speed up checkout, text-message based transactions as well as making it possible to pay using a phone both while shopping online and at physical stores. “We will offer mobile payment at physical retail stores just like credit or debit cards.
This will be coupled with loyalty programmes and discounts in the next two years,” said Promod Saxena, cofounder of Oxigen, India’s first mobile payment solution provider. Saxena, who earlier worked with the Essar Group, said his company backed by Citi Group Venture Capital and Microsoft Corporation, has been profitable for over three years now.
In Noida, Paytm, founded by Delhi College of Engineering graduate Vijay Shekhar Sharma, launched its mobile wallet service three months ago and has bagged 3.7 million customers. This month, the company will launch a mobile wallet service for online shoppers buying on fashion portal Jabong. “By the first week of June, the service will be available at stores like Cafe Coffee Day, Dominos, Marks & Spencer,” said a senior executive of Paytm, who requested anonymity as talks are still on.
Experts said a key benefit in using a mobile wallet is that the transaction failure rate is minimal compared to an average of 20% through electronic payment gateways. Most payment failures happen at the backend server of the bank, whereas in the m-wallet, customers already have cash stored, so the bank is bypassed in the transaction. “If a transaction has to fail, it would happen when the customer is trying to put in money to his wallet. After that, the transactions are smooth and fast,” said Pratyush Prasanna, vice-president at Paytm. The higher penetration of mobile phones in smaller towns is also driving popularity for mobile wallets.
“In smaller towns, the penetration of credit cards is very low so any payment method supported by mobile is bound to find traction with users,” said Pragya Singh, associate vice president at retail consultancy Technopak . Typically mobile wallets can also be used to pay bills and insurance premiums and perform other financial transactions directly from their mobile phones.
“I recharge my account with Rs 1,500 and keep topping up my mother and my prepaid mobile hassle free,” said management student Rajat Dhanda who uses the Paytm service. Electronic payment solution provider Citrus Pay has over 1,500 registered merchants including Indigo and Meru Cabs on its mobile platform.
“M-wallets now need to differentiate themselves in the eyes of the customer by offering discounts, cash backs just like credit cards do. With a market as big and diverse as India, the scope is huge,” said Sanjay Swamy, managing partner at investment firm AngelPrime Partners.
Money on Move Who is Doing it A host of companies such as Citrus Pay, Paytm and Oxigen What is on Offer A range of solutions for mobile users to recharge prepaid connections, buy tickets and transfer money to friends and family In the m-wallet, customer has cash stored in his mobile as a prepaid facility, which he can use for various payments.
