While internet connectivity plays a vital role in digital payments methods, smart phone users are limited to 17% of the mobile phone users. Feature phones occupy a significant share of the mobile user base in rural and semi-urban areas where payment options without connectivity would go a long way in moving towards less-cash economy. Therefore, any strategy promoting less-cash initiative across the length and breadth of the country should be applicable for smart phone as well as feature phone. Small business units in India lack ability to execute digital payments due to paper work needed for registration, as there is chronic mistrust on paperwork in rural area. Considering the limitations of the feature phone users for carrying out digital payments, some Fin-tech companies and Banks came out with alternate solutions enumerated below:
Unstructured supplementary service data gateway (USSD): This service could be used on smart phone as well as feature phone. Every mobile network service provider company has separate codes for USSD. This code could be used for any kind of transactions from shopping to funds transfer. The length of the message in USSD is restricted to 150 words in English whereas length would remain reduced to 50-60 words in other languages.
PayTm’s No Internet Wallet: In order to promote cashless transaction, PayTm launched No Internet scheme that would run in rural areas as well without net connectivity. Using toll free number 1800 1800 1234, one could pay to any PayTm customer without any active internet connectivity.
SBI’s Wallet Scheme: SBI also launched a SIM based service that would work on Smart Phones as well as Feature Phones without internet. Such service is routed through SMS where every cashless transaction would take place through codes sent on the mobile number registered with Bank.
Debit Cards: These cards could be used at merchant locations where EDC machine is available where debit card could be swiped for making payment. Debit cards are convenient way of making payments for smaller transactions as well. Even customers not using debit cards realized its importance for carrying out cashless payments.
Credit Cards: One could apply for Credit Card to go cashless if not in possession of one. Banks offer credit cards based on good track record and/or satisfactory CIBIL score. Credit card limit act as a lender of last resort when one can pay transaction amount at a later date through billing cycle without any interest.
Mobikwik Wallet: It is one of the top Fin-tech company in the payment space that came up with light B.M. application that works even in low speed internet area. Since every transaction require just 1 MB data, this could be effectively used in low connectivity rural areas to pay for daily expenses.
Keep watching this space for more updates on Payment space!
Comments