How mobile technology is changing the way you pay
Cash and cards have made
way for virtual payment tools that are fundamentally altering the payment
transaction landscape in the country. A peek into what is and will be on offer.
Banking has truly gone
digital, thanks to the extent of smart phone penetration in India, which stands
at 17%, and grow ing at 45% annually. “The payments ecosystem in India has
witnessed frenzied activity over the past year, with 2-3 digital banking apps or
mobile wallets being launched every other month,“ says a Motilal Oswal study on
digital banking.According to the study, by 2019, the share of cash in consumer
payments will shrink to 40%, from 70% now. A Boston Consulting (BCG) report
says that smartphone users will equal bank accounts by 2020. This explains why
banks and fintech companies are falling over one another to attract customers
by sprucing up their digital banking facilities.
While mobile wallets, which
allow you to store money in a Web account--offered mainly by ecommerce
portals--have ushered in the digital revolution in the country, several other
innovations are changing the way you pay, and many more are on the anvil.
Unified Payments Interface (UPI)
This offering from the
National Payments Corporation of India makes transferring funds as simple as
sending an SMS. All you need is an user ID linked to your bank accounts. It
eliminates the hassle of conventional money transfers such as filling in
details--beneficiary's name, account number, IFSC code, etc. “You can make and
collect payments across banks through this application. Your smartphone acts as
the first factor of authentication, saving time and effort,“ says A.P. Hota,
Managing Director and CEO, NPCI. Some 29 banks are part of the UPI network.
“UPI changes the (payments) paradigm and will enable payments to be collected
or made by just using a VPA (virtual payment address),“ explains Shantanu
Sengupta, Managing Director and Head, Consumer Banking (India), DBS Bank.
Customers will be able to access the services once banks launch UPI-based apps.
Near field communication (NFC)
The NFC technology converts
your mobile phone into a payment device, eliminating the need to swipe your
debit or credit cards.You just have to tap your phone at the NFCpowered
readers. “Payments are executed instantly and in a secured manner, eliminating
the need to share your card details with the merchant,“ says Rajiv Anand, Group
Executive and Head, Retail Banking, Axis Bank. Currently, SBI, ICICI Bank and
Axis Bank offer this facility to their customers.
Quick Response (QR) code
Consider this: You have
shopped online and selected cash-on-delivery as your payment option. However,
the day your package is delivered to you, you do not have enough cash with you
to make the payment. It is in situations such as these that QR code-based
payment app come into play. If your bank has created QR code-reader app, you
can scan the code printed on your package and the payment will be credited to
the seller from your account. “You need not enter any details. The app on the
smartphone will read the QR code on the package and prompt you to enter the
PIN. Once you do so, the trans action is completed,“ says Hota. QR code tech is
also useful while making over-thecounter payments.
Cardless cash withdrawal
Several banks including
SBI, ICICI Bank, Axis Bank and Bank of Baroda allow you to transfer funds to
beneficiaries without a bank account. To transfer funds, you need to add the
name of the recipient to the list of your cash withdrawal beneficiaries and
share her mobile number, name and address with the bank. You can initiate the
transfer by selecting the recipient, after which you will get a numerical code
on your cell phone, which should be shared with the recipient. An SMS
containing another code (one-time password) will be sent to the beneficiary's
mobile number. To withdraw the amount, the recipient has to visit specified
ATMs, enter both the codes and mobile number.
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