Rural internet users in India are growing rapidly and with increasing disposable income are indeed an important target segment. There has been strong increase in online purchases and demand of services from Tier 2, Tier 3, and rural areas of India. Consequently, e-commerce and mobile payment companies have been shaping up their strategies to gain share in this segment which is characterized by high volume but low margin. PayNXT360 expects that the synergetic partnership between mobile / digital payment service providers and merchants will define a natural entry point for inclusion of the unbanked and under banked Indian population into the formal financial system and would support their inclusion on a bigger scale. According to PayNXT360’s recent report, this consumer segment is set to outperform growth of overall industry, posting a CAGR of over 70% during 2016-2020.
To seek growth in regions underserved by banks, Paytm and Mobikwik has tied up with small local stores in semi-urban and rural areas. To get in touch with 15,000 stores, Paytm has partnered with NumberMall to promote adoption among users who are reluctant to use digital payment methods or are unable to access them. Through reward linked loyalty programmes, the cash users in rural areas were incentivized to convert their money into wallet money.
Also, Mobikwik has entered into similar partnership with e-commerce player Storeking to bring mobile payments to 10 million rural users in 600 small towns and 5,000 villages of India. This partnership is aimed to bring the convenience and success of e-commerce model to rural India. Through this collaboration, rural consumers are able to access StoreKing's e-commerce at the tablet based terminals of the retail stores. The rural users downloaded the MobiKwik mobile app and added cash to it to buy goods. MobiKwik’s mobile payment solution allowed instant one-tap payments for orders placed on the terminals as well as for in-store purchases.
Recently, to facilitate payments for hotel booking for the underserved Indians, Oyo, a hotel room aggregator, partnered with Itzcash, a digital payment company. The partnership intended to help OYO tap potential consumers in the Tier 2 and 3 cities and lower income consumer segments. This accounts for the next 500 million consumers who do not have access to either a debit or a credit card.
To engage with millions of underserved commuters in smaller cities in India, Itzcash also entered into similar partnership with Uber. The partnership allowed Uber to further extend and integrate its on-demand platform to millions of new potential riders in the metros and T2-T3 towns and cities.
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