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Indian mobile payment players focus on low income group to gain market share

Indian mobile payment players focus on low income group to gain market share

Indian mobile payment players focus on low income group to gain market share

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Paytm, the mobile payments company which is 40 percent owned by Alibaba, has announced that it is working on developing a service that will enable customers to make payments without internet connectivity. When Paytm user is offline, the new mechanism within the app will generate a one-time password and barcode. To make payment, customer can display the barcode or one-time password at the point of sale or vendor. To offer greater security, the password will change every 60 seconds. The vendor, if offline, would need to enter the password in the system to complete the transaction.

Paytm has collaborated with few airlines and rolled out a pilot to allow travelers make in-flight mobile payments via Paytm mobile app. The firm intends to launch the service in full scale in August 2016. Paytm has also received regulatory approval for launching payments bank, which is expected to commence operations in August 2016. With a massive 240 million smartphone users, India has witnessed a significant growth in usage of mobile payment apps over the recent years. According to PayNXT360’s findings, the usage of mobile payments app is picking up in Tier 2, Tier 3, and rural areas. Indian consumers primarily use mobile payments apps for recharge their phone and travel. However, with payment services being made available without internet connectivity, there are several new avenues that will come up.

Apart from offering convenience to customers, the offline payment mechanism is expected to provide insights on consumer purchase patterns. Based on these insights, manufacturers and retailers can proactively create products and services; create marketing strategies that will influence consumer purchase.

Mobile payments services face certain challenges in India such as consumer’s willingness to adopt mobile payment services due to lack of trust and inconsistent data connectivity. With Paytm’s new mechanism addressing the issue, it is expected that mobile payments will record strong growth over the forecast period.

To know more and gain deeper understanding of how mobile payment industry is shaping up in India, click here.

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