India’s coming UPI battle in mobile payments
It’s 9pm on a Wednesday and late evening shoppers are rushing through their midweek purchases before shops close in Chittaranjan Park, a south Delhi neighbourhood where you are likely to hear Bengali more than any other language. Fish seller Krishna Pada Roy is busy on a call with a regular customer.
Taslima Nasreen, the Bangladeshi author living in exile since 1994, is on the line asking of the fish available. She settles on fresh water fish and some prawns. The bill is close to Rs2,500. “Taslima didi pays once or twice in a month by cheque, but I accept all sorts of electronic payments from Paytm to Google Tez, and all kinds of credit and debit cards,” says Roy, who has been in the fish business for 32 years.
Roy was introduced to digital payments by his son, who joined his father’s business after doing his MBA. “It’s easy for many customers and sets me apart from others,” Roy continues in Bengali. “With time it’s important to change… cards, Paytm, Google are changing the way people transact. I don’t expect people to carry wads of currency notes anymore.”
Convenience is what digital payments are riding on. Not far from Roy’s fish shop is Suraj’s tea stall. A couple has just had two cups of tea. To pay, the man takes out a Rs500 note. Suraj frowns. “Change nahi hein (You don’t have change?),” he asks. When told no, the tea maker asks, “Paytm hein (Do you have Paytm)?” The man nods, takes out his mobile phone, and transfers Rs20 to Suraj’s Paytm account.
Paytm is India’s largest mobile payments platform, widely known for its mobile wallet and less so for its recently-launched payments bank. Suraj knows none of this. “How do I know? I just accept the money and the next morning I pay for milk using it,” he says in Hindi. He started using Paytm during demonetisation and used to clock 15-20 transactions a day. Today, the number is less and he asks for it only if customers don’t have change.
The demonetisation Suraj is referring to is the 8 November 2016 announcement by Prime Minister Narendra Modi withdrawing the legal status of Rs500 and Rs1,000 notes, invalidating 86% of the country’s currency in circulation by value then, forcing citizens to shift to non-cash modes of transactions including credit and debit cards, electronic banking and mobile wallets, among others.
All non-cash transactions (immediate payment service, electronic clearing service and national electronic funds transfer, credit and debit cards, usage at point-of-sale, all prepaid instruments, m-wallets and mobile banking) in December 2016 grew by 28% from the October figure— sharply higher than the 10% in the preceding months.
Photo courtesy of JanetandPhil.
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