Mobile payments growth is accelerating fast, particularly in developing countries including India, China, SE Asia and Latin America. Our recent post at PaymentsNEXT featured a mobile news roundup with some powerful potential developments in India where the country could eliminate all cards and ATMs, and switch completely to biometric payments by 2020.
Imagine paying with your fingerprint or an eye scan, without the need for cards or even a smartphone? Possible countrywide in India in just three years.
The Indian government recently eliminated its small currency Rs500 ($7.33) and Rs1000 ($14.67) notes to reduce tax evasion and money laundering.
In a country where 90% of transactions were cash payments, you can imagine the impact on consumers and small business.
Some online businesses, including Amazon and Flipkart saw an immediate though temporary drop in business because most online orders were cash on delivery (COD).
Millions adopt digital payments weekly after demonitization
At the same time, as Prime Minister Modi and his economic advisors hoped, mobile payment apps suddenly took off. Within weeks, even street food vendors, market sellers and taxis were taking payments by Paytm, PhonePe and other popular mobile payment platforms.
CNNMoney quoted Paytm founder and CEO Vijay Shekhar Sharma who said prior to the rupee shortage, Paytm was getting tens of thousands of new mobile app users daily:
“Now we’re signing up half a million customers a day,” he told CNNMoney. Since the move was announced, he says Paytm has added 10 million users — growing its customer base by 7% in less than a month to 160 million.
In its 2017 budget, the Indian government is considering a levy on cash payments and cash deposits to further promote and encourage cashless payments.
Toss debit cards, ATMs, even digital payments?
What’s most fascinating was a statement by Amitabh Kant, Chief Executive Officer, National Institution for Transforming India (NITI) Aayogat at the World Economic Forum in Davos last week.
Kant predicted by 2020 India could eliminate debit cards, credit cards and ATMs. Instead payments would be made by biometrics such as fingerprints or eye scans.
Arundhati Bhattacharya, head of the State Bank of India, agreed it was possible because 1.1 billion of India’s 1.3 billion people have already registered their biometric data in the government’s identification program.
One giant digital leap?
The biggest challenge in the short-term is that 70% of Indians still do not own a mobile phone.
But it’s possible the entire developing country could make another huge leap forward in banking and payments technology with biometric payments.
The disruption will start in India but will be felt far and wide and the banking and payments industry will keep a close eye on what it means to developed countries as well.
The disruption and innovation in financial services in India and around the world are just getting started.
Author: Douglas Hall, Publisher, PaymentsNEXT
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