Fintech is Changing Money Management for the Better

Are you stressed about managing your money? Most of us are at one time or another. Whether you are trying to track your spending or invest spare change, fintech is here to ease your money worries. That’s the promise of the entrepreneurs and engineers working in one of Silicon Valley’s fastest growing industries.

Fintech (a combination of financial and technology) startups are introducing simple ways to invest and track your finances while established institutions are creating and using new technologies to offer personalised recommendations to customers. Using a smartphone to make a purchase or comparing loan rates online can make your life simpler and save you money, and that’s just scratching the surface of what fintech enables.

Technological innovation in finance is in substantial growth with no signs of slowing down. An Accenture report found fintech investment in the first quarter of 2016 grew by 67 percent compared to the first quarter of 2015. That’s a continuation of the year-over-year increases that’ve taken place over at least six years.

The investments are helping people at all levels of the economic spectrum. According to the Bill and Melinda Gates Foundation, even those living in extreme poverty are poised to benefit from changes in mobile banking. Over the next 15 years, it expects two billion people to open their first bank account and start saving and spending money with a phone.

 

Six Ways Fintech Can Help

There are many ways to manage your personal finances, and here are just a few examples of how fintech services could help you in everyday life.

  • Banking online.Online- and mobile-only banking can offer you limited fees, low or no minimum account balances and a relatively high-interest rate on your savings. You’ll often be able to access your money for free using an associated network of ATMs, or get reimbursed for ATM fees, and deposit money by taking a picture of a check or making an online transfer.
  • Budgeting easily and efficiently.Instead of relying on a paper notebook or spreadsheet, you can use digital budgeting apps. There are apps that sync with your bank, credit and other financial accounts to let you track your spending and savings in real time. You can even track spending in different categories, receive notifications when you exceed your budget and analyse the data to see what categories eat up most of your paycheck.
  • Saving money automatically.Online and mobile apps can make it easy to grow your savings. Some services use algorithms to calculate how much money you can afford to save at a given time, and then automatically transfer the money to your savings account.
  • Investing your money with minimal effort.Technology has made tracking and managing your investments easier. Robo-advisors are computerised investment management services that offer low fees, an easy setup and a customised investment strategy based on your information and goals. You can let a computer create and manage your investment portfolio with just a few clicks and make adjustments based on your desired risk and when you’ll want to withdraw their funds. Additionally, some companies can round up every purchase you make with your debit card and automatically invest the money with a robo advisor.
  • Getting paid back quickly.Say goodbye to the 10-minute post-meal negotiation as you and your friends try to split the check. Mobile apps linked to checking accounts let you send and receive money instantaneously. One person can pay the bill and the others can send him or her money from their phones.
  • Comparing loan offers.If you’re looking for a loan, there are services that allow you to enter your information once and receive loan offers from competing lenders. The easy-to-use shopping tools can make it easy to find out which lender will give you the lowest interest rate, saving you money over the lifetime of the loan. Choose the loan with the best terms and you may be able to complete the entire loan process online.

These are six examples of how you can use new financial technologies, but you might also be benefiting without even realising it. For example, a startup could power your bank’s online chat service or send you notifications when there’s suspicious activity on one of your accounts.

Keeping Your Funds and Financial Information Secure

Even if a new app or service seems reputable, it’s important to take steps to safeguard your finances and personal information.

  • Always research an app or service before you use it.Search the name of the app or company and look for reviews. Positive reviews by major media outlets are usually a good sign that the service is considered to be reputable and reliable.
  • Improve your password security.Password protection is a deceptively simple, but very important aspect of online security. Don’t use the same password for two accounts, financial or other. Wherever possible, use two-factor authentication, meaning security is double-layered and someone can’t log in with your password alone. For example, see Google’s password tips for more advice on keeping your accounts safe.
  • Use biometric authentication.Some banks offer various forms of biometric authentication that you can use to log into your account from your phone. Rather than type in a password, you can use the phone’s camera or microphone to verify your account with your fingerprint, eye, face or voice.
  • Enable location-based alerts.Geolocation tracking can easily add an extra layer of security to your account. With your permission, banks can use GPS data from your smartphone to verify that you’re with your card when it’s used for a purchase. As an added bonus, your bank might be able to easily notify you where the nearest fee-free ATM is and send you discounts or offers from nearby merchants.
  • Don’t put all your money in one place.Keeping your assets in several accounts can help limit your risk. Even if one account is attacked, you’ll have access to your other money while the financial institution looks into the matter and makes you whole. If you think your account has been compromised, consider the Consumer Financial Protection Bureau(CFPB)’s advice for reporting suspicious charges and avoiding future losses.

Bottom Line: Fintech is changing the way people interact with money, and there’s something for everyone. Though there are important security risks to consider, the innovative and intuitive services can help you save and manage your money.

This article is originally published on HuffingtonPost.in at 14 September 2016.

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Step-by-step guide to use Unified Payment Interface (UPI) App

Unified Payment Interface (UPI), launched by National Payments Corporation of India, which is expected to bring revolutionary changes to the payments landscape in India has gone live recently. Several banks, including ICICI Bank, Canara Bank and Yes Bank, have already announced the launch of UPI-enabled apps, which can be used by both customers of the respective banks or an account holder of another bank to transact payments. UPI allows both sending and receiving money through the new mechanism.

But how do the new apps work? Many of us would be asking this question as more and more banks come up with their UPI apps. NPCI has listed out detailed steps on how a bank customer can use the various app. It has explained in a simplified manner how money can be sent or received right from registration to concluding the transaction.

Here is how it works:

Steps for Registration:

  • Download the UPI application from the App Store / Banks website
  • Create profile by entering details like name, virtual id (payment address), password etc.
  • Go to “Add/Link/Manage Bank Account” option and links the bank and account number with the virtual id

Generating M-PIN:

Select the bank account from which you want to initiate the transaction
User clicks one of the options:
a. Mobile Banking Registration/Generate MPIN
b. Change M-PIN

For registering or generating M-PIN:

  • You will receive One Time Password (OTP) from the issuer bank on his/her registered mobile number
  • You have to enter last 6 digits of debit card number and expiry date
  • Enter OTP and preferred numeric MPIN (MPIN to be set) and clicks on ‘submit’
  • After clicking submit, customer gets notification (successful or decline) for changing M-PIN
  • Enters old MPIN and preferred new MPIN (MPIN to be set) and click on ‘Submit’
  • After clicking submit, customer gets notification (successful or failure)

How a UPI transaction is performed:
PUSH – Sending money using virtual address

  • Log on to UPI application
  • After successful login, select the option of Send Money/Payment
  • Enter beneficiary’s/Payee virtual id and amount and select account to be debited
  • You will get confirmation screen to review the payment details and clicks on ‘Confirm’
  • Enter MPIN
  • Get ‘successful’ or ‘failure’ message

PULL – Requesting money

  • Log in to the bank’s UPI application.
  • After successful login, select the option of collect money (request for payment)
  • Enter remitters/payer’s virtual id, amount and account to be credited
  • You will get confirmation screen to review the payment details and clicks on confirm
  • The payer will get the notification on his mobile for request money
  • Payer now clicks on the notification and opens his banks UPI app where he reviews payment request
  • Payer then decides to click on accept or decline
  • In case of accept payment, payer will enter MPIN to authorise the transaction
  • Transaction complete, payer gets ‘successful’ or ‘decline’ transaction notification
  • Payee/requester gets notification and SMS from bank for credit of his bank account.
This Article is originally published on Financial Express on August 31, 2016.

What’s New in Bitcoin Core 0.13.0?

What’s New in Bitcoin Core 0.13.0?

Bitcoin Core 0.13.0, the thirteenth generation of Bitcoin’s reference client as first launched by Satoshi Nakamoto almost eight years ago, has now been tagged for release. This is one of the final steps in the software release process and initiates the Gitian build process.

Bitcoin Core 0.13.0 was developed by some 100 contributors over a period of about five months. And while much of the development effort over this time has also been focused on Segregated Witness, which will be activated only in a future minor release of the software, Bitcoin Core 0.13.0 includes about a dozen notable improvements compared to Bitcoin Core 0.12.0.

These are the most important changes.

Child Pays for Parent

The number of transactions on the Bitcoin network has been steadily growing over time. As a result, more blocks have been filling up, and miners typically charge higher fees to include transactions into blocks. Transactions that don’t include sufficient fees usually take longer to confirm, or perhaps even never confirm at all. This has proved to be somewhat problematic, especially in periods where so-called “stress tests” were conducted on the network, with spikes in the total number of transactions on the network and substantial transaction delays.

Individual users can solve this problem by including a higher fee on their transactions, incentivizing miners to prioritise these transactions. This is possible even after a transaction is sent, using Opt-in Replace-by-Fee (RBF); however, not many wallets include this option yet. Additionally, RBF is only an option for the sender of a transaction. Up till now, the receiver had no way to bump the fee for an incoming transaction to speed up confirmation.

This problem is effectively solved with a trick called “Child Pays for Parent” (CPFP). CPFP is a policy used by miners to select which transactions to include in blocks. With CPFP, miners don’t necessarily pick the highest paying (and valid) transactions, but instead, pick the most profitable set of transactions. In other words: they will select a low-fee transaction if a subsequent transaction that relies on the low-fee transaction offers a high enough fee to compensate. The miner will include both at the same time.

In practice, this means that the receiver of a low-fee transaction can “attach” a high-fee transaction, spending the same coins to himself. Incentivized by the new, high-fee transaction, a miner will include the set of transactions. As such, the receiver won’t have to wait as long for a confirmation, while the miner can increase his income.

Compact Block Support

Bitcoin’s peer-to-peer protocol is currently somewhat inefficient. Nodes send each other most transaction data twice: once as a transaction as it is initially sent over the network, and once as part of a block when the transaction is confirmed.

This has some disadvantages. For one, sending transaction data twice requires more bandwidth than it really should, which adds to the cost of running Bitcoin Core. Second, and perhaps more importantly, forwarding new blocks to several peers at the same time can cause significant outbound bandwidth spikes. This potentially disrupts internet-usage each time a new block is found, which is potentially annoying for users. And perhaps, more importantly, it can slow down block propagation over the network as well. Slow block propagation can, in turn, favour bigger mining pools, thereby incentivizing a more centralised mining landscape.

Compact Blocks (BIP 152), developed by Bitcoin Core and Blockstreamdeveloper Matt Corallo, are designed to decrease excess data-transmission. When a new block is found, nodes initially only communicate very compact hashes of transaction data. As nodes have already received the full transaction data when it was originally sent over the network, they can use these hashes to figure out which transactions are included in the block and reconstruct the block themselves.

This trick does not always work out perfectly, however. If a node did not yet receive the initial transaction before receiving the hashes, that node, of course, can’t select the transaction. Additionally, in rare cases a wrong transaction may hash into a right hash, fooling the node into believing it received the right transaction until it tries to reconstruct the block and finds it doesn’t add up.

In both these cases of failure, the node simply requests the specific transaction data after all. Even with only some complete transactions in them, Compact Blocks will transmit over the network much faster, and require significantly less bandwidth.

Hierarchical Deterministic Key Generation

Up till now, Bitcoin Core generated a new and completely random public and private key pair for each new Bitcoin address. While this is important for security and privacy reasons, it can also be a bit of a burden for users. In order to secure all private keys against loss, they need to make regular backups.

Hierarchical Deterministic (HD) Key Generation (BIP 32), a cryptographic trick developed throughout 2012 and 2013 by Bitcoin Core developers Gregory Maxwell and Dr. Pieter Wuille, and Armory-developer Alan Reiner, solves this problem. With HD key generation, Bitcoin Core creates a completely new key pair for each new address, but all these keys are derived from a single, 12-word seed. As long as users remember this 12-word seed, they can re-generate all private keys and access all their funds.

It should be noted that HD Key Generation is not a new feature in the Bitcoin world. Many wallets already included the option for several years. It just never existed in Bitcoin’s reference client — until now.

Performance & Security

And of course, Bitcoin Core 0.13.0 introduces a significant list of performance and security upgrades. The full extent of these improvements is beyond the scope of this article (see Bitcoin Core 0.13.0’s release notes for all the details) but in short…

The database cache memory has been increased, which allows nodes to speed up transaction validation and more. The Bitcoin command line tool now allows users to type passphrases and other sensitive information interactively, improving security by not storing this information in plain text. The software is updated to use C++11 and Python 3, newer versions of the programming languages, that allow for more powerful features. ARM (a specific microprocessor architecture) binaries for Linux are now part of the release, so users don’t have to compile this for themselves. Data concerning which transactions in a mempool rely on each other (as utilised with CPFP) can be communicated to external programs. Nodes on the network can request to receive only transactions that meet a certain fee threshold to prevent DoS attacks. And, lastly, there have been a lot of low-level improvements to the peer-to-peer, remote procedure call, and messaging system (ZMQ) protocols.

This blog is originally published at Bitcoin Magazine on Aug 22,2016.

 

Security Should Be Paid for digital world?

Security Should Be Paid for digital world?

When performing their daily banking routines, customers don’t want to be bothered by complex security features and authentication procedures. Today, they expect simple and fast user interfaces and often take for granted that their financial resources are protected. However, at the UK’s leading FinTech event last month, a question was posed on whether security should be paid for, like how we pay a premium for our home security systems every year. As important as security is for creating a seamless customer journey and user experience, should customisation be offered to suit each customer’s needs? Could security as a service (SECaaS) drive the future for personalised customer experiences in financial services, and should the customer pay extra for more sophisticated protection?

In today’s cluttered financial services landscape, where products offered by most banking providers are very similar, consumers are spoilt for providers but not with choice. Heritage financial institutions are diversifying their portfolio and new challengers entering the market, like Starling in recent weeks and Atom earlier this year, offering alternative versions of core banking products.

Every little bit helps when banks are trying to differentiate themselves. Banks such as Capital One and Vietnamese Timo (Time Is Money) are basing their entire operations around the nurturing and taking care of the customer, delivering their services with a cup of coffee to attract new business and prevent churn.

merchant online payments security
Image Credit: mydigitalshield.com

Though less visible than front office customer interactions, cyber security is a vital part of the customer experience. Protection of both funds and sensitive personal data is often taken as a given, until a breach occurs. A breach is disastrous to any banking institution, especially legacy banks whose main strength is that they are regarded as more trustworthy than newer, technology-driven disruptors. Trust from customers and investors can be tough to repair and cause real financial damage. When JP Morgan Chase experienced a data breach in 2014 the company’s shares dropped 1.1% following the news and the company’s value was down 1.3% two months after the announcement.

However, as the way we bank continues to evolve and more processes move onto digital platforms, the cost of technology to protect data and respond to regulatory demands is putting financial institutions under pressure. According to a report by Capgemini, worldwide spend on compliance technology will rise to nearly $100 billion by 2018.

Security should be reliable in the applications provided by financial service companies from log-in to payment authentication. Whether the customer has a hectic urban lifestyle or located in the countryside, far away from bank branches, on-the-go banking is now a natural part of our everyday lives. In London, the 7.01am commuter train from Reading has become the busiest bank branch as commuters try to fit banking into their schedule as they head into the City. SECSaaS could offer customers the choice to scale security based on expectations, while helping banks reduce costs of keeping up with the complexities surrounding adequate data governance and ward off cyber attacks in an increasingly digital world.

To have a better experience, users are requesting more openness and insight into banking services and continue to identify areas of improvement in traditional banking processes. The hype around blockchain technology and its potential uses for authentication and verification of transactions speak to a desire for transparency in banking.

End-to-end visibility of transactions was named as a main trend for the future of banking at the highly regarded FinTech conference, as this is a security process with direct impact on the customer experience for financial services on web and mobile. Open banking APIs can bring this transparency for banking, moving on from the notorious days of an industry run by the ‘old boys’ club’. In the UK, the Competition and Markets Authority has issued an order for Barclays, HSBC, Nationwide, Santander, Royal Bank of Scotland, Lloyds Banking Group, Danske, Bank of Ireland and Allied Irish Banks, to adopt common API standards by the end of Q1 2017.

Another aspect of authentication which needs to be simpler is identification. As banking moves into the digital sphere, proving your identity with paper documents and plastic cards becomes a hindrance to fast access to financial services, critical to those who are new to a country. Biometrics, such as fingerprints or iris recognition, is an exciting field for customer focussed developments for identification options. Barclays is rolling out voice biometrics at its call centres to simplify identification and Mastercard is now accepting selfies as ID for verifying online payments.

For all these processes, security is at the core.

Ownership and responsibility over security in the FinTech world is still being decided and regulations in this area are nascent. This is a great opportunity for banks to step up and lead. Who will be brave enough to do this?

This article is originally published on finextra.com

The Government of India and RBI’s plan to promote electronic payments

The Government of India and RBI’s plan to promote electronic payments

The biggest challenge in the Indian market is the consumer’s dependence on cash. Electronic payments account for 5 per cent of the Personal Consumption Expenditure (PCE), in India, so there is an opportunity to convert the remaining 95 per cent from cash to electronic modes.

T. R. Ramachandran, Group Country Manager, India & South Asia, Visa, says there is a need to work together with all industry players, regulators and the government to achieve the objective of increasing the penetration of electronic payments in the country.

ePaisa Mobile Point of Sale from ePaisa on Vimeo.

How do you plan to promote electronic payments?

The Government of India and RBI’s collective resolve to move to a cashless society is very encouraging. A 2016 study conducted by Moody’s and commissioned by Visa Inc. analysed the impact of electronic payments on economic growth across 70 countries between 2011 and 2015. Overall, the study showed that there is a direct correlation between implementation of electronic payments and sustainable growth, and this change is most prominent in emerging economies.

The study estimates that migration to electronic payments added nearly $300 billion to GDP across 70 countries and 2.6 million new jobs globally.

In India migration to electronic payments added nearly $6.08 billion to its GDP and created 1.4 million jobs. Countries like South Korea that provided tax breaks to consumers and 2 per cent reduction in VAT to merchants for card payments have benefitted from an accelerated pace of e-payments, strengthening the overall ecosystem.

The Indian government has already proposed an ambitious plan to incentivize electronic and digital payments. Once implemented, these measures would propagate tax compliance, increase Citizen-to-Government payments, reduce the cost of managing cash and encourage consumers to transact electronically. The key to achieving this vision would be efficient infrastructure and delivery mechanisms (mobile phones, small and payments banks, financial correspondents), which will help achieve the scale of acceptance of electronic payments

Can you throw some light on the latest global trends in mobile payments?

In the past decade, no technology has transformed consumer lifestyle, across the globe, more than the smartphones. Smartphones have already revolutionized messaging, photography and media, and payments are next. India is currently the second largest smartphone market in the world, with over a billion smartphones expected to be sold in the next five years. The increasing popularity and adoption of mobile devices present a huge opportunity for the growth of mobile-based digital commerce.

In line with the vision of growing the footprint of electronic payments in the country, Visa launched mVisa in India, last year. As per the data from RBI, the total transaction volume from mobile banking in India, accounted for Rs.1,035.30 billion for the year 2014-15, which clearly shows the trend of ‘payments on the move.’

Some key global trends in mobile-based payment solutions are Near Field Communications (NFC) and Host Card Emulation (HCE). These technologies have transformed the way people are paying and getting paid. We believe payments will become so invisible that people won’t need to know their account number to make a payment. Card numbers will still exist as identifiers, but they will be completely in the background. People will use a password, PIN or their thumb to authenticate payment from their mobile phone or smart device.

How is mVisa different from mobile wallets?

mVisa is a bank and card agnostic payment solution. It is an acceptance mark which indicates to consumers and merchants the standard experience of how a transaction will be performed using a mobile device. This separate acceptance mark differentiates the experience from other channel experiences available on the Visa network. Thus, mVisa is a transaction channel descriptor.

mVisa is neither a digital wallet nor a prepaid wallet. The mVisa name is not indicative of the underlying store of value (account types) involved in the transaction. The underlying account as the source of funds, which can be of any type: savings, line-of-credit, transactional, or even a card.

On the other hand, a mobile wallet requires a customer to store a value on it, to be able to transact. Through mVisa, our aim is to build an ecosystem where digital payments are seamlessly accepted and adopted. Considering that mobile phones are ubiquitous in India, this solution will help drive India’s cashless economy goal, by creating universal acceptance ecosystem for digital payments.

mVisa was introduced as a pilot in Bengaluru last year. How do you evaluate the response so far?

Since its launch, mVisa is now available through the mobile banking apps for customers of SBI, HDFC Axis Bank, Bank of Baroda and Bank of India.

In the next 4-5 months, we plan to launch mVisa with almost 7-8 more issuers there by enabling an increasing number of customers to secure, digital commerce on their mobile phones.

Visa has launched several new use cases with acceptance for F2F expanded to include large merchants like Health & Glow and Food World, and new online enablement for recurring usage categories like fast food and bill payments. The mVisa payment option is now available online on Pizza Hut, Dominos and Idea Cellular. The most recent use case added is of recharge options using mVisa for subscribers of Tata Sky.

How do you see the market growing?

The market is growing. Overall, the government’s intent to move to a less cash society is encouraging. With over 600 million debit cards in India, more and more Indians have access to digital currency. The opportunity to shift to electronic payment is huge.

There are many challenges on the road to achieving a cashless society. What are your thoughts?

The three key challenges that need to be addressed are: Creation of infrastructure – Acceptance and cost of PoS terminals; How do you make transactions easier and more convenient for consumers, without compromising security; Apprehension to use electronic modes of payment and Indians being culturally inclined to spend in cash.

This article is originally published on thehindu.com

Digital payments in India seen touching $500 billion by 2020

Digital payments in India seen touching $500 billion by 2020

A Google-BCG report says digital payments industry in India will grow 10 times to touch $500 billion by 2020 and contribute 15% of GDP

Hyderabad/Mumbai: India is headed for an exponential increase in digital payments over the next four years, according to a new study by Google (Alphabet Inc.) and Boston Consulting Group released on Monday.

The digital payments industry in Asia’s third-largest economy will grow by 10 times to touch $500 billion by 2020 and contribute 15% of gross domestic product (GDP), the report predicted.

Ever-increasing penetration of smartphones, the entry of several non-banking institutions offering payment services, consumer readiness to adopt digital payments, progressive changes in the regulatory framework will power the trend, it said.

“Spurred by smartphone penetration, and supported by progressive regulatory policy, the digital payments industry is at an inflection point and is set to grow 10x by 2020,” said Rajan Anandan, vice-president of Google, South-East Asia and India.

“It is telling that half of India’s Internet users will use digital payments and that the top 100 million users will drive 70% of the GMV (gross merchandise value)—a clear indicator of the growing importance of the digital consumer,” Anandan added.

Key Barriers to digital payments in India
Image Credit: livemint

The contribution of non-cash modes of payments, i.e. cheques, demand drafts, net-banking, credit/debit cards, mobile wallets and unified payment interface (UPI), is seen doubling to 40% of the consumer payments segment by 2020.
Non-cash transactions will exceed cash transactions in the economy by 2023, the report forecast.

The trends should benefit a plethora of start-ups in the digital payment space as well as traditional banks, promote online commerce and boost financial inclusion in India.

Online shopping, utility bill payments and movie ticket purchases were identified as the top three services for which Indian users make digital payments.

Online payments through digital wallets  and  debit/credit cards have been emerging as a preferred transaction mode over the past few years, mainly due to the ease of transaction, availability of smartphones and affordable Internet, and enhanced security and encryption methods, which led to greater confidence among customers.

Online ticketing firms, such as IRCTC (railways), Makemytrip, Yatra, Cleartrip (airlines), redBus and Abhibus (buses) and Bookmyshow (movie and event ticketing) also played a crucial role in giving a leg-up to digital payments by getting customers to transact online.

Digital transactions began booming after the advent of e-commerce firms, such as Flipkart, Snapdeal, Amazon, Myntra, Jabong and others, that began offering attractive discounts to woo customers. As smartphone penetration increased in the country, mobile wallet companies, such as Paytm (One97 Communications Ltd), Mobikwik (One Mobikwik Systems Pvt Ltd), Oxigen Services (India) Pvt. Ltd, Citrus Payment Solutions Pvt. Ltd, Freecharge and others, sought to make life easier for consumers by encouraging them to store money in their online wallets to transact more easily.

Convenience has emerged as the most important factor that is driving this growth, followed by availability of offers, while opting for digital payment methods, the report noted, adding that Indian consumers are 90% as likely to use digital payments for both online and offline transactions.

Some digital wallet firms such as PayTm, Mobikwik and Freecharge are now encouraging their customers to transact using their mobile devices at select local grocery stores, restaurants and petrol filling stations in the offline world. These offline points of sale will contribute to 60% of digital payments eventually, the report said.

But ensuring universal acceptance of digital payment methods and reliable speed of transactions during peak hours are two key concerns highlighted by merchants which could inhibit their growth and usage.

The Indian digital payments story will be dominated by micro-transactions, which will form a substantial portion of the industry. Over 50% of person-to-merchant transactions are expected to be under Rs.100.

The report predicts that the value of remittances and money transfers that will pass through alternate digital payment instruments will double to 30% by 2020.
A bulk of small ticket transactions, which take place in retail, are not digitized because of poor acceptance network in India, said Govind Rajan, chief executive officer of Freecharge. There are only 1.2 million point-of-sale (POS) terminals in India, for example, compared to 13 million in the US.

“With mobile becoming ubiquitous, these transactions will happen mobile-to-mobile. As a result, most small payments, which either have a problem of time or a problem of change, will actually move to mobile,” Rajan said. “That will be the single biggest driver.”

The report, Digital Payments 2020’, is based on research conducted by researcher Nielsen AG with more than 3,500 respondents, combined with BCG and Google’s industry intelligence.

Sure enough, digital payments have proved to be addictive. The study noted that 81% of existing digital payment users preferred it to other non-cash payment methods.

Reserve Bank of India (RBI) data shows that mobile wallets have already surpassed mobile banking in volume terms. The volume of mobile wallet transactions doubled during April 2015-February 2016 period to cross Rs.55 crore, noted M. Sinha, chief operating officer of Mobikwik, which sees its user base growing five times to 150 million in two years. “Mobile wallets are the first financial technology services or applications that they use as they are easy to operate, are secure, and in our case, also have a cash loading option,” Sinha added.

Source: livemint

Digital Payments Move From Discounts To Consumer Loyalty

Accept mobile wallet payments in-store
Image credit: epaisa.com

Digital Payments have taken the market by storm. With market pundits predicting that digital wallets would soon replace physical card payments and the working millennial generation’s love convenient digital payments, has accelerated the exponential growth of digital payment landscape across the world. From financial big weights to Google, companies are hungry to grab a big bite from the industry.
India has embarked on the digital journey and it’s no surprise that Indians haven’t shied away from embracing digital payments. Utility bills to transfer of funds, Indian digital payment companies have been aggressively churning out offers and new features to garner better user engagement. TranServ, a Mumbai based digital payments company founded in the year 2010 has helped to create a secure payment platform for social payments and for partner merchants as well.
In an exclusive interaction with CXO Today, Anish Williams, CEO and Co-Founder, TranServ talks about the company and the digital payments landscape in the country.

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What were the key trends observed in the market as digital payments were being embraced by the market from both a consumer and merchant perspective?

2015 can be said to be the landmark year as far as the evolution of the Indian digital payments industry goes. We saw a tangible shift away from the discount-centric business model that was being used by most payments service providers, and witnessed a greater focus on nurturing consumer loyalty by creating better end-user experiences and adding greater value to a consumer’s digital transaction. As such, we saw several new avenues of innovation, such as peer-to-peer transactions and mobile-based payments through native mobile applications such as messaging and contacts, being explored by the industry players.
This innovation in approach was appreciated by the consumers, who were quick to adopt these new developments into their everyday transactional behavior. Merchants, on the other hand, also welcomed these changes, as this allowed them to control the consumer’s payments experience and provided them with more channels to engage with their customers.

TranServ launched India’s first social mobile wallet “Udio” in the year 2015. How did the concept of social wallet evolve and what is the potential for social payments?

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Be it going out with family for a dinner or embarking upon a fun filled trip with friends, most of our day-to-day activities involve transactions that are social in nature. However, managing these social transactions through traditional payments such as cash can often be a hassle. As we were looking to build unique and engaging payment experiences for our users with TranServ, this scope for digitization of social payments captured our imagination. This led to the conceptualization and launch of Udio, India’s first social wallet, which integrates the functionality of digital transactions with a community-driven social aspect to add greater value and convenience for users.

As far as its potential goes, the P2P payments industry is growing at an exponential rate and is already the payment option of choice for the Millennial users in developed economies such as the US and Europe. Venmo is a prime example of this growth; nearly $1 billion was transferred through the PayPal property in January 2016, demonstrating a growth of 2.5 times over the previous year’s numbers. An average Venmo user opens the app three to four times a week to check up on what their friends are spending their money on, and is increasingly using the wallet to share bills for meals and track expenses owing to its convenient usage.

The traction that we’ve received since the launch of our Udio wallet, from both consumers and businesses, underlines the market for social transactions in India. We are currently processing payments worth INR 100 crore on a monthly basis for our business partners, which include several leading businesses such as BookMyShow, Askmebazaar.com, Portea and Crownit as well as a host of smaller merchants and Facebook stores.

Moreover, in addition to our consumer-facing payments solutions such as bill-splitting, sending/requesting money and social gifting and the B2B Product Suite, we are also leveraging Udio to enable our Digital Meal Voucher programme. Aimed at eliminating the inefficiencies associated with the paper-based approach of corporate expense management, the initiative is making the process of corporate reimbursement swifter, more convenient and cost-efficient, and is finding great response from both employees and employers. With other novel developments such as native phone integrations with Micromax and cash-to-digital remittance programmes currently being developed by us, we are confident that social payments in India will witness a massive growth in their adoption in the near future.

How viable are the features like SpitzBill, social gifting when compared to other avenues available to consumers?

To gauge the viability of social payments, consider a simple scenario. Let us suppose you meet with your friends for dinner. When it comes to settling the bill, there is almost always a problem when it comes to tendering the exact share for each person, which invariably leads to someone having to cover for someone else. You have to manually keep a track of how much money you owe or is owed to you, which – to say the least – is cumbersome and full of hassle. Compared to that, through bill splitting, everyone can conveniently and instantly pay for their exact share without any hassles. Moreover, the wallet also keeps a track of how much you owe or are due to receive, and gives you timely reminders through push notifications. This convenience and ease of transaction is what makes social wallets much more viable as a medium for transaction for the end-consumer when compared to other available payments options.

What lead to TranServ’s association with Government projects such as Government Grant Disbursal and Amul Dairy Solutions. What significant value addition has TranServ been able to provide these projects?

TranServ was launched as a digital payments service provider that leveraged technology to make the end-user’s transactional experience swift, seamless and secure. Our empanelment with initiatives such as Government Grants Disbursal and Amul Dairy Solutions was secured due to the robustness and convenience of our payments platform that was being used by our banking partners.

Since these associations were meant to extend the benefits of financial inclusions to the largely unbanked population, we had to develop and implement unique payments solutions to make the initiatives successful. For the Government Grants Disbursal initiative, we launched a Skilling Card supported by a bank account for every beneficiary which allowed them to receive funds directly into their cards. A specific portion of these funds were restricted for usage only at empanelled training partners, while the rest could be used at ATMs and merchants. On the other hand, our involvement with the Amul Diary Solution saw us streamline the payments process for milk collection by equipping partner farmers with prepaid electronic cards. Funds could be loaded into the card electronically, which could then be used at ATMs and partner outlets for withdrawing cash. Moreover, we also enabled SMS alerts on funds credit and transactions, allowing farmers to receive payments on a timely basis and get them complete visibility of their transactions.

There have been speculations regarding the fate of mobile wallets. How has UPI affected the course of mobile wallet start-ups?

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The perceived ‘threat’ of UPI to wallets operating in the country has been exaggerated a lot. If anything, the introduction is a promising development for mobile wallets, which are already using payments tools such as NEFT and IMPS to enable digital transactions on their platforms. UPI is an interoperable payment tool which is designed to add greater convenience to the consumer’s transactional behavior by leveraging mobility-based solutions. This is something that mobile wallets have already been doing successfully over the past decade or so. Moreover, there are certain challenges that UPI needs to overcome; achieving scale and hassle-free operations in the country the size of India could be a major challenge, while there are other factors such as a mandatory bank account which could potentially put off the unbanked population. Integrations with mobile wallets, which already have more users than credit/debit cards, will in fact probably be necessary for UPI to overcome these challenges. In the long run, we could witness UPI being leveraged by mobile wallets to enhance their service delivery and add greater value and functionality to the end-user transactions.

Source: cxotoday.com