From the age of barter system, the consumers have travelled to the times of plastic money and virtual wallets (m-wallet, e-wallet). Given the evolution in technology with continuous monitoring and ease of access, the new consumer due to shortage of time is swiftly inclining towards the digital way of making payments. However, the reach of Internet limited to the urban areas is acting as a major impediment.
While discussing about the mode of payment preferred by consumers in future, a question to ask is whether cash will endure? With the new India paying through cards and transacting at a click, it is not a Herculean task to comment that technology will reshape the way of payment from what it is at present and probably cash would be replaced.
Going by the current scenario, India generates around 100 billion bills per year and top 20 cities contribute to 1/3 of this market, but as of now, India lags behind mature markets when it is about the digital gateway payment, reason being the unorganised market dominating Indian retail scenario, unavailability of bank accounts etc.
The ring of m-wallets
With increasing penetration of smartphones, the mobile industry is changing gears to be the dominant connected device for payments.
Speaking at the Indian Retail Congress 2015, Shashank Joshi, MD, Money On Mobile mentioned mobile payment as the future of Indian markets. While emphasising on the existing hurdles, he said, “Acceptability is the one most important part in mobile money revolution.”
With the increasing adoption of smartphones and 3G becoming a reality, the outlook for mobile payments is optimistic for India. But at present, m-wallet is not favoured by users here, let alone the e-wallets.
Citing reasons behind this sluggishness, Krishna Lakamsani, Managing Director, IPay Tech (I) Pvt Ltd opined, “Payments are moving from physical cash to digital currency. In India especially, that is little far. People are not using mobile wallets because here, there is no such lavish cash kept which people can think of spending later. If you load money into m-wallet, that money is stuck until you use it for future.”
Further, Bit-coins and social media currency are being proposed as new way of payments, post m-wallet and e-wallet. However, the ongoing practices, in which a consumer is charged immediately while buying online, but needs to undergo a long haul of a week to get his money refunded in case of order cancellation, or gets coupon of same amount, clearly disinterests one to pay online.
In a nutshell, undoubtedly, smartphones and technology are going to revolutionise the retail business, especially the payment modes, but these bottlenecks need to be sorted out first.