India’s two largest operators want to play a major role in the country’s ambition to promote digital payments and banking, with both making announcements this week.
The country’s largest provider, Bharti Airtel, plans to roll-out its payments bank nationwide in January following early success with a pilot, while nearest rival Vodafone targeted merchants with its contactless payment platform M-Pesa Pay.
Vodafone’s platform, which currently supports money transfer, now adds contactless retail payments. In an attempt to capitalise on the digitisation of the economy, the operator is targeting retailers with a system that enables them to accept mobile payments.
The M-Pesa announcement was made shortly after Bharti Airtel revealed its savings accounts had attracted 100,000 customers within the first two weeks of debuting its pilot scheme in Rajasthan. Following the completion of the trial, Airtel announced the service would be rolled out across the country at the start of 2017 with a number of customer incentives to encourage uptake.
Airtel and Vodafone’s announcements are part of the preparation for a move to a cashless – or at least less cash – economy in India following a number of measures from the Government to encourage digital payments. These include a much publicised and scrutinised policy by Prime Minister Narendra Modi to withdraw higher-value Rupee notes from circulation in the country.
The Indian Central Bank stated the measure was necessary to: “Tackle counterfeiting Indian banknotes, to effectively nullify black money hoarded in cash and curb funding of terrorism with fake notes.”
Payment infrastructure companies are also preparing solutions to smooth the transition to digital, with mobility services provider Mahindra Comviva launching a cloud payment product earlier this week. The company said the system allows customers to quickly deploy digital payment facilities. Its current customer-base includes several banks and mobile operators.
In addition to the strong uptake reported by Airtel payment bank, other providers are reporting increases in digital money usage. According to India’s Economic Times Idea Cellular, and others in the sector, enjoyed a ‘two-fold surge’ in usage of its mobile wallet since the announcement of the government’s strategy to remove high-value notes.