M-Payments Heat up in India, but Will UPI Make Wallets Redundant?
As the country’s Unified Payments Interface threatens to leapfrog mobile wallets in the country, one mobile wallet provider wins a capital gain, while another wallet program launches. Mobile wallets command major buzz around the world, but a new report from an Indian brokerage and investment firm casts doubt on whether that technology will have lasting power there. That’s because a fledging mobile payments system called the Unified Payments Interface, or UPI, threatens to leapfrog mobile wallet technology, according to a report from Centrum Broking.
The report contends that UPI threatens to make such mobile wallet services as SBI’s Buddy, ICICI Bank’s Pockets, HDFC Bank’s Chillr and Paytm “redundant.” Further optimism for the rise of UPI comes from what the report calls 212 percent growth in mobile payment value in February 2016 compared with the same month in February 2015.
UPI, backed by the Reserve Bank of India and other financial institutions, is designed to reduce the cash economy in a country where, according to the World Bank, only 53 percent of people have bank accounts, enables payments via smartphones and a two-factor authentication process. A UPI press release from April says that 29 banks plan to implement the program, though only “a few” had gone live as of last month. “We are confident that several banks will join UPI this year and the number will multiply further,” said A.P. Hota, CEO of National Payments Corporation of India, the umbrella organization for India’s national retail payment systems and UPI.
Mobile wallet providers aren’t showing any signs of backing down. Mobile wallet provider MobiKwick recently raised $50 million in a Series C funding round that included Japan-based GMO Internet Group, Treeline Asia and Sequoia. MobiKwick says it has 30 million users for its services, which include bill payment, money transfer and mobile phone top-ups.
That’s not all: Reliance Jio this week said it has launched an Indian-focused mobile wallet service called JioMoney Wallet. Already, some 50,000 merchants in the country have signed on for the service, according to published reports.