CHENNAI: The Union Home Ministry’s proposal to limit replenishment of ATMs before 8 pm in cities, 5 pm in rural areas and 3 pm in naxal affected ones could curtail availability of cash across the country. But, the move has opened up a window of opportunity for the mobile wallet and digital payments segment.
According to Paytm, India’s market leader, it is one that they are already exploiting. Over the last few months, Paytm has been expanding its peer-to-peer (P2P) system of cash transfers to penetrate the local kirana shop and small vendor user base.
“By the end of the year, we aim to put in place infrastructure in 100 cities that will enable our users to go through an entire day transacting only through their Paytm wallets,” said Nitin Misra, VP Products, Paytm. The firm’s physical touchpoints, particularly important in rural markets, now stands at 67,000 and is growing.
Oxigen Wallet is also exploring ways to enable similar infrastructure, trying out a variety of systems - QR Codes, OTPs, and even a virtual VISA card that works exactly like a normal credit or debit card. “The entire thrust fits in with the government’s vision of digitising currency,” said Ankur Saxena, Director and Chief Mentor, Oxigen Wallet.
There are challenges. The huge rural market needs to be cracked and getting merchants on board will need consumer adoption and vice versa. “It will take time. But it will happen,” stated Misra.
The trend is already in progress. Paytm expects to have 500,000 merchants by 2016 and PayUMoney already has 150,000 SMBs transacting through it. Other wallet players are also rapidly expanding user bases. When, and if, these will replace hard, cold cash, however, only time will tell.