admin
July 3, 2016
Ankita Rai, Financial Express
Clearly,
the recruitment of offline merchants is critical to the viability of
payment solutions, since most consumer transactions still happen
offline. “Payment providers that want to win the game will need to
focus on usages that are frequent,” says Devangshu Dutta, chief
executive, Third Eyesight, a retail consultancy.
This
is exactly what Paytm is doing with focus on small but frequent
transactions. Paytm wallets can be used at petrol pumps, education
(school and college fees), restaurants, Mother Dairy and large-format
retailers such as Spencer’s and More. “The payment business runs on
scale. There is a small margin. So the attempt is to create an
ecosystem where consumers use wallet for frequent transactions, though
small in amount,” says Shankar Nath, senior vice-president, Paytm.
Out
of three million daily transaction on Paytm, it claims 40% are coming
from offline. Paytm currently has four lakh offline merchants using its
platform, including mom-and-pop shops.
To facilitate payments
through wallets at PoS terminals and online payment gateways, mobile
wallet player Freecharge has partnered with payment aggregators like
ePaisa and CCAvenue.
It has also forged partnerships with
retailers like Shoppers Stop, McDonald’s and Caf� Coffee Day. It claims
to have crossed a million transactions in February, with a growth rate
of 15-20% per month. Similar is the case of MobiKwik, whose wallet is
currently accepted at 25,000 retail outlets, which includes Big Bazaar
and Central Mall. “Since last July, the biggest focus area has been on
offline merchants. The next big use case is unorganised grocery
stores,” says Akash Gupta, GM, marketing, Mobikwik.
Even as
wallet players are tying up with big format retail stores, experts say
a bulk of the big market for wallet resides at the mid-to-low end
retailers. “Even in China, one-third of wallet transactions are
remittances, a third is peer to peer and the remaining one third is
commerce. We expect the Indian market to follow a similar lead,” says
Pramod Saxena, founder and chairman, Oxigen Services. The volume of
transactions through mobile wallets stood at 255 million in FY15. The
value of transactions carried out through mobile wallets has grown by
500% between 2014-2016. “In value terms, however, mobile wallets
contribute just 0.1% to the consumer payments market. Average
transaction size still remains low,” says Kalpesh Mehta, partner,
Deloitte.
(Published in Financial Express)