NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Monday, October 7, 2013

When Mrugank S., 33, an information technology professional in Bangalore, Karnataka, ordered five teaming carts of produce from Big Basket, an online grocery store, he chose “card-on-delivery” as the mode of payment. But when the two deliverymen wheeled up to his flat on the 14th floor of a tower, he pulled out a wad of bills.

Mr. Mrugank often uses his credit card, but that afternoon, nervous of a botched delivery, he turned to a reliable habit and pulled out 6,000 rupees, or $97, in cash, as most Indians do. “It is a little bit safer,” he said.

Had he chosen to pay with his credit card, one of the couriers would have pulled out a petite, rectangular device, which, when plugged into a headphone jack, turns any smartphone into a point-of-sale terminal, a vehicle for cashless payments.

Ezetap, a Bangalore startup that was formed in 2011, built the mobile payment device and partnered with Big Basket, the 2-year-old grocery delivery service in the city. Big Basket equipped each of its couriers with the hardware.

In the past two years, at least 10 new companies like Ezetap have begun operations in India, according to the investment-banking firm Avendus. Several more have sprung up from young technology companies and established banks, offering smartphone applications, software gizmos and online channels intent on pushing Indian commerce toward one of the nation’s most pervasive goods.