“There is a lot of scope for innovation and disruption, both for banks and for third party technologies companies and startups,” commented TS Anantharaman.
Making payments in India has never been easier. A handful of startup applications such as Oxigen-Wallet, Instamojo and iKaaz’s MOWA are spearheading the way to enable peer-to-peer (P2P) payments, making it possible for anyone to send money simply through a smartphone without having to divulge any financial information.
ICICI launched digital payment device m-pesa, originally from Kenya, in 2013; and most recently, HDFC Bank has teamed up with a startup called Chillr to enable peerto-peer payments. “The fundamental difference in P2P is that a user can wire someone money as long as they know your phone number, taking out procedures like one-time passwords,” said Sony Joy, CEO at Chillr and co-founder of its parent company MobMe.
“There is a lot of scope for innovation and disruption, both for banks and for third party technologies companies and startups,” commented TS Anantharaman, director of the Catholic Syrian Bank, who has invested in Mob-Me.”Banks can have significant cost reductions and be able to serve more customers with less branches once the ecosystem becomes a lot more digital.”
OxigenWallet currently sees 42 million digital transactions every month, while Instamojo’s transaction volume has grown 20% monthon-month since it launched two-and-a-half years ago.
Chillr has been downloaded by 50,000 users since its partnership with HDFC was announced in February, and is looking to add five other major banks to its roster within the next few months. MOWA aims to have 5 million users by the end of this year, with a minimum of two transactions per month per user.
These startups currently have no monetisation plan based on its peer-to-peer model, but some like MOWA and Oxigen Wallet charge a transaction fee of 1.5% on merchant payments. Meanwhile, Chillr is venturing into functions such as mobile recharges and data cards. The increased ease of P2P digital payments in India mirrors development in China, where the dominant messaging app WeChat enables users to transfer money to each other within the mobile application itself.