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

Sunday, 15 January 2017

Cards Vs Mobile Wallets

The battle lines are drawn

Ever since demonetization announcement of 08 Nov , the all-consuming debate is :

"  In the end , who will win ?  Credit-Debit cards  or  Mobile Wallets  ? "

In the past few days , following reports / statements / statistics , have appeared in News papers / Social Media / TV channels :


BILL  GATES ( TOI / 19 Nov 2016 )

" 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 "

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

AMITABH KANT ( CEO - NITI Aayog ) [ ET / 11 Jan 2017 ]

" Cards would lose their relevance as Indians will make transactions using just their thumbs through Aadhar-enabled apps on merchant phones connected to biometric readers "

SHARAD SHARMA ( co-founder , iSPIRT ) [ ET / 11 Jan 2017 ]

"  UPI transactions will exceed debit card transactions in a matter of months

BHIM is one of 30 such apps available today . It is one of the MOST LIMITED apps in terms of functionality . In terms of smoothness , it is well designed . But it is meant to be a REFERENCE app

Even as millions throng the mobile app and feature phone function, competitors ( including traditional banks ), have to exceed this THRESHOLD or BENCHMARK. Even if some banks don't, they and their customers are not losing out because they are on the UPI platform

By April , I expect  almost 150 apps, including those by traditional banks

In India, digital companies complain about TWO FACTOR authentication . But with every added layer of authentication, the system reduces security risks. This is India-first by accident because elsewhere , the incumbents are very strong : VISA and MasterCard in the US, or Alipay in China

UPI is the SMTP of payments , and BHIM is only the shape of things to come "

DEWANG NARELLA ( CEO , Atom ) [ ET / 11 Jan 2017 ]

"  One of the reasons for for the faster adoption of cards is the better user-experience

PoS terminals can complete a transaction within 8 seconds and give customers a frictionless experience . Unless the new forms of technology can offer faster check-out experience, I do not see mass adoption of emerging payment solutions

Banks are in the process of installing 1 million terminals by March "

T R RAMCHANDRAN ( Group Country Manager, VISA ) [ ET / 11 Jan 2017 ]

"  Much of India still needs to be convinced about digital payments

Digital payments make only 5 % of the current personal consumption expenditure in India . This is not a zero-sum market, where if someone does one transaction more, someone else will do one transaction less . We should be focused on displacing cash "


"  It should be left to the consumers to choose their mode of transaction . It's the consumer who will decide which solution to use . When we in the public and the private sector start making pronouncements, we don't have knowledge of what consumers want " 

SAKET MODI ( Co-founder , Lucideus Tech )

"  If a mobile wallet has ONE FACTOR authentication ( you need to login and transact and just key in the password ),

and , credit card has TWO FACTOR ( swipe plus password ),

BHIM has THREE FACTOR authentication

What made WhatsApp so popular was that the user ID was the phne number.

 Similarly, the user ID is the basis to authenticate with the bank

The THIRD FACTOR is the four digit UPI PIN, which only the user knows. Even if it is possible to replicate the SIM card or a phone gets lost, transactions cannot be done unless the PIN is known "

A P HOTA ( MD and CEO , NPCI )

" In our country of a billion mobile phone connections ( active connections could be around 800 million ) , nearly two-thirds of mobile phones are simply feature phones without data connectivity . We have built USSD-based mobile payment system with 51 participating banks. BHIM integrated USSD infrastructure with UPI "

BUSINESS LINE ( 13 Jan 2017 )

After initial response, demand for EESL's PoS machines turns tepid . Procurement tender may be scrapped if entities that evinced interest do not respond

This is the largest tender for PoS machines in the world ( 10 lakh ) and EESL's success in this tender would mean virtually doubling the number of PoS machines in the country.

India , at present, has 14 lakh PoS machines , of which only 50,000 are mobile

HINDUSTAN  TIMES ( 16 Jan 2017 )

 @   PoS transactions as a % of total Card transactions...... 22 %

@   No of PoS terminals per million people ( 2015 )............ 693 ( 45000 in Australia )

*  ARUNA SUNDARARAJAN ( Secretary , MeiT ) [ Hindustan Times / 16 Jan 2017 ]

"  We are looking at a lot of new technologies that enable cashless transactions with less investment on infrastructure

We are also looking at enabling digital payments with the use of VOICE BASED and NFC-based technology. 

The Centre is in talks with technology providers that can enable a mobile phone to become a MOBILE POINT-OF-SALE ( mPoS )

We are in talks with new companies like mPayGo , ToneTag and other start ups "

NEERAJ TANDON ( Co-founder and CEO, mPayGo )

"  All that merchants need to have is a smart phone and a Net connection to process card payments "

KUMAR ABHISHEK ( Founder , ToneTag )

"  The major concern for the Government is that only 20 % of the entire cell phone-using population in India has smart phones

With ToneTag, in case of smart phones, the transfer is done by a single touch using SOUND WAVES

In feature phones, users need to dial a toll-free number, and the payment instruction is carried out through interactive VOICE RESPONSE "


As to , " WHO WILL  WIN ? " , find my own assessment at  :

    {  http://myblogepage.blogspot.in/2016/11/rip-credit-card.html  }

*   When BHIM is here, can ARJUN be far away ?    


    {  http://myblogepage.blogspot.in/2016/12/when-bhim-is-here-can-arjun-be-far-away.html  }   




 16  Jan  2017


www.hemenparekh.in / blogs