Trends in banking part-VIII
- 2. Total No. of Jan Dhan Accounts opened 2015-16 182 Million
- 3. 117 Million+ Indians use “SMART Phones” 100 Million+ Indians are active on Facebook 50% of the total internet population will be constituted by rural residents by 2018 160 Million RuPay users are conducting 20 Million transactions per day Approx.70-80% of Indians will use their mobiles to access Internet-enabled services by 2018 Some Facts on Banking & Technology
- 4. E-Wallets face a big challenger in Unified Payments
- 7. Transaction on Mobile Phones (YoY Growth)
- 8. NPCI has launched UPI that is set to make transferring money as simple as sending text messages-some fear that mobile wallets may become obsolete The fear stems from the fact that only banks are allowed to be part of UPI. The wallet players have been left out of its ambit. NPCI currently operates the Immediate Payment Services(IMPS)that allows people to make online txns & transfer funds from one bank to another 24*7.UPI will allow its customers to do the same on a SMARTPHONE Unlike IMPS or other similar payment systems where one needs to add One-Time- password or the IFSC Code of the bank, UPI txns will be linked to a unique identity generated by the user himself which will act as his virtual address for all online txns. The address could even be the users mobile number or Aadhaar number. This means people can make online payments with far greater ease than they can today At the same time, using UPI could also make it easier to directly transact with a seller for a buyer. Wallet payments services allow people to make payments only to those who have also subscribed to the same wallet services Ex: A consumer can pay for say, a taxi ride using his e-wallet only if the driver is also using the system but UPI does not have such barriers & one can send money to any account As UPI gears for its launch, e-wallet players are worried that they won’t be able to keep- up with its sweeping reach & the ease of use of its technology
- 9. The existing bank-led wallet offer their products to only those who have an account with them.UPI is open to account holders of all banks. This significantly increases the pool of customers UPI can tap into, compared to banks which have a limited universe of customers-as per the research report by Centrum Wealth An added feature of UPI is that “it allows users to send reminders to their creditors by raising a “Debit Request”. While the payment is made only after the user has accepted the request, it is expected to come in-handy for transaction between e-commerce players & merchants The convenience factor which was being taken care of by some wallet players will get completely replaced by introduction of UPI & hence some of these players might find themselves irrelevant Players who are waiting to enter the wallet space will now prefer to take a wait-and- watch approach & see how the existing players are able to weather the storm of UPI Some players have started to work as check-out service providers by allowing users to link their Credit & Debit Cards to their mobile wallets. Such service providers usually earn up to 1.5% of the transaction value as revenue which is higher than the commission earned if consumers transact from their digital wallet Some of the bank promoted wallet system such as SBI Buddy, ICICI Bank's Pockets & HDFC Bank’s Chillr will be affected The only Mobile Wallets that could escape competition are those which are engaged in reaching the unbanked & helping them with remittances Wallet players can help India move a step closer to becoming a cashless economy if they are also allowed to join the UPI Platform according to Mr.Naveen Surya, Chairman-Payment Council of India & MD of ItzCash, a mobile wallet. He is of opinion that “wallet players can tie-up with Offline retailers & merchants & get them to transact via UPI that will not only eliminate cash but also the need for Point- Of-Sales terminals. In other words, Digital Wallets could play an intermediary between a seller & a customer who wants to transact via UPI”
- 10. Murugappa Group surrenders its in- principal approval for payments bank citing the reasons that the “Payments Bank is not a viable business model for the group”
- 11. The 30,000 Cr Murugappa Group has surrendered its in-principal approval for payments bank .The decision was taken because the basic concept of payment bank has changed & they do not make business sense for the company The Group finds it no longer like a Financial Inclusion ..The group requires huge capital & long gestation period The objective of setting-up the payment bank was to further Financial Inclusion . Cholamandalam was to use its subsidiary “Cholamandalam Distribution Services Limited(CDSL)” to establish the payment bank The company was expecting to invest about Rs.100 Cr in the business & make a sustainable business in 2-3 years whereas it found later that it has to pump in more money to meet the losses for at least 6-7 years The Group believes that companies which are going into the “payment bank “ space will be only telecom companies. The base of Payment Bank has changed very fast. The Group have to burn a huge amount of capital even to stay in the business Only 4-5 players will enter into the market
- 12. Anup George Rebello Manager The Catholic Syrian Bank Ltd (anuprebello.6@gmail.com) http://www.slideshare.net/anuppresentations