Hi Friends,

Even as I launch this today ( my 80th Birthday ), I realize that there is yet so much to say and do.

There is just no time to look back, no time to wonder,"Will anyone read these pages?"

With regards,
Hemen Parekh
27 June 2013

Monday, 21 November 2016

RIP , CREDIT CARD ?



Yes , if we are to believe Bill Gates

During his recent visit to India , he is supposed to have said so much !


Source : TOI / 19 Nov 2016 

Interview with Surojit Gupta :

Quote :

The US is not as digitized as Kenya is or Tanzania . I use credit card sometime. I use the cell phone quite a bit now but it's still a mixed thing and you know it is expected that the plastic card will go away in US in the next 4-5 years and then it will be just your cell phone



Source : Business Line / 18 Nov 2016

Quote :

According to sources privy to the meeting, Gates told Minister of IT , Ravi Shankar Prasad that  smart phones are better instruments than plastic cards and payment banks are more sustainable approach for financial transactions


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Now Bill Gates knows that , in USA , credit / debit cards have been around for ages and now number close to 1500 million ( roughly , 5.5 per person ) !


As against this , in India , credit / debit cards made their appearance some 20 years back and now number 723 million ( includes 697 million DEBIT cards, of which , 300 million are issued by National Payments Corporation of India , along with 254 million Jan Dhan Accounts )

This works out to roughly 0.55 card per person !



DISADVANTAGES  OF  PLASTIC  CARDS :


#  They need Card Readers ( Card Swiping machines  /  Point of Sales machines )

    In India, currently , there are only 1.44 million machines ; and 100 million retail shops !

    And , roughly 1 machine for 900 persons , as against 1 machine for 25 persons in
    China !


#  Usage of Credit cards is quite costly !

    Besides " Entry Fee " and " Annual Renewal Charges " , you need to pay an interest rate
    of approx 16 % on credit amount used. If you fail to pay in time, this can go up to 30%

    In many cases , this has ranged between 36 % to 48 % !

    As per RBI , as of end May 2016 , credit card outstanding has gone up to Rs 42,000 crore


#  There have been a large no of cases where hackers have stolen PIN and fraudulently
    used the card details to make purchases , without the knowledge of the owners . Then
    there have been many cases of " duplication " of cards when handed to a shop


#  Since dozens of Banks have issued hundreds of types / varieties of cards for all kinds of
    " purposes " , it is very difficult for a common man to select the most appropriate one


#   Procedure for getting a card issued in your name is lengthy, requiring many documents 



ADVANTAGES  OF  MOBILE PAYMENT APPS :


#  Of the total mobile phone population in India , ( around 1033 million ) , smart phones
    constitute 240 million . By 2020 , all mobile phones in India are expected to be smart !


#  Mobile Wallet apps ( Paytm  /  Oxigen  /  itzCASH  /  Paylo  / FreeCharge etc ) , have
    actually transformed a smart phone into a Card Reader / Point of Sale machine !


    They are saying : " Honey !  We shrunk the Machine to fit in your pocket ! "



#   UPI ( Universal Payment Gateway ) does not require you to give any of your bank a/c
     details to anyone !

     Just create your own unique " signature " and start transferring funds between
     participating banks . Soon , it will cover ALL banks and enable payments to
     sellers as well  !

    
#   Downloading of most Mobile Wallet apps is very simple and takes 2 / 3 " touches " on
     your mobile screen !

     Last week , CEO of Paytm said in a TV interview :

    " Nearly ONE MILLION persons have started downloading our app , EVERY DAY , since
     announcement of demonetization . We expect to serve 500 million users by end 2018 "



#   Hardly a day passes without some or other Start Up , releasing a Mobile App to deliver
     hundreds of Financial Products / Services ( including which ATM is full of notes ! )

     Do not be surprised , if P2P lending happens through mobiles in one year !


#   Mobiles have almost become THE DEVICE for all Online purchases , whether of goods or
     of services . In 2 years , entire E - Commerce will be through mobiles !



#   Through IndiaStack , expect entire E - Governance ( including ALL payment of taxes ) ,
     to take place through Mobile phones

     Same will also be true of delivery of all government services to citizens AND redressal of
     all grievances / complaints by citizens



#   A smart phone costing Rs 5,000 can do a hundred thing ( other than phoning and
     Video talking ), whereas a Point of Sale machine costing the same , can just do ONE
     THING ! 

 

#   And when high denomination notes get embedded with RFID chips ( embracing the
     inevitable ), it will be a Mobile App (  Fak - e - Mon  ) , which will spell :


     "  RIP , CREDIT / DEBIT cards " !



If you find it difficult to believe Bill Gates , ask Sundar Pichai /  Satya Nadela / Nandan Nilekani / Mark Zukerberg  etc


They will tell us :


" India has the golden opportunity to overtake USA , by skipping the Jurassic Age of PLASTIC CARDS "


About time , plastic card issuers ( and manufacturers of PoS machines ) re-invented themselves  !


If they don't make themselves obsolete , someone else will  !


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22  Nov  2016

www.hemenparekh.in / blogs

   
 
    
 


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