M-payment: What Is Holding It Back In India?

With more than 600 million active mobile phone users in the country, it is but natural to expect that mobile phone will be one of the key tools for processing electronic payments in India. However, it is yet to gain traction even among consumers who are actively paying for products and services purchased online.

Mohit Bhatnagar, managing director of Sequoia Capital, moderated the session on Mobile Payments in Techcircle's Online Payments and Loyalty Conference held in Delhi and set the ball rolling when he quipped, "Mobile payment is just like the Lokpal Bill for India. We all know once it comes around, it will change the ecosystem. But it just doesn't take off!"

So what is really holding back m-payments?

"E-commerce has just evolved in India and there is the age-old trust issue, as far as mobile payments are concerned. The same trust issue that is plaguing e-payment made via one's computer. In fact, we need to educate consumers. People's awareness regarding mobile payment is still extremely low," said Dewang Neralla, CEO of Atom Technologies.

Another panellist Gautam Shiknis, CEO of mChek, pointed out how consumer education was one of the key things missing from the industry ecosystem and there had never been a proper demonstration of how exactly a mobile phone can be used to pay for online shopping.

"M-commerce has not really reached the visual consciousness of the masses," he said.

The sheer heterogeneity of the groups of people using mobile phones throws up a huge challenge for m-commerce. It is an exceptionally wide range – right from tech-savvy users possessing high-end smartphones to the mass category where the use is limited to basic calling and texting. Therefore, reaching out to the broad wavelength of users for pushing m-commerce would require customised solutions.

"Most of these cases point to an evolution waiting to happen for mobile commerce. It will happen and with a little push to different kinds of mobile wallets, mobile payment will take off," noted Harinder Thakkar of Paytm.

Regulations for any kind of online payment structure are also crucial. The addition of one-time-password (OTP) for online transactions, a different security measure for net banking and yet another measure for mobile transactions might be too disconcerting for an average user. Educating the consumer on online transactions is, therefore, crucial, remarked Thakkar.

The panellists have rightly pointed out that in case one transaction goes wrong, the faith of the consumer is irreparably lost for that particular website. However, the consumer will not notice whether the process has been properly followed or not. Thus, it is pertinent to have proper guidelines and awareness programmes for customers – so that they know that mobile payment is as secure as all other modes of online payment.