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Monday / March 27.

The future of digital wallets: PhonePe’s bid to break redundancy and innovate

Mobile Wallets soon to take over the market

’Tis the season of digital wallets and e-commerce. August, 2016 witnessed the development of UPI (United Payments Interface): a platform wherein bank to bank transfer and direct payments from one’s bank account were made possible. If that wasn’t enough, the sudden boost in online transactions owing to the advent of demonetisation of higher currency notes contributed to an exponential rise in the usage of digital wallets.

However, with the introduction of UPI and its developments, Pankaj Makkar, the Managing director of Bertelsmann, voiced concerns about the convergence of UPI with already developed digital wallets. The idea here is that with transactions through these interfaces, many of the other features provided by wallets like Paytm and Mobikwick are on the risk of becoming redundant.

In this sphere of constant developments, competitions and innovations, Flipkart has put forward a giant player in the mix. Built in collaboration with YES bank, PhonePe is a digital payment application, presently available only for Android devices with the iOS version releasing soon. Integrated with the United Payments Interface (UPI), it begins its enterprise by countering the risk of redundancy from the very offset. The application requires you to link your bank account with it, for direct payment, instead of constantly ‘filling up’ your balance.

Often the idea of directly connecting your bank account with anything that requires internet and online connectivity becomes a source of great discomfort.

Often the idea of directly connecting your bank account with anything that requires internet and online connectivity becomes a source of great discomfort. Instances of frauds and losses plague minds of everyday common populace. It is an important question, however. How does one rely on something that has been a victim to so many fraudulent schemes which look amusing in films, but are anything but that in reality? PhonePe has been devised with efforts to provide a secure transaction system. Coupled with the MPIN (similar to an ATM PIN) and direct link with the bank, by default it makes for a more reliable and secure method. Payments can only be carried out through a registered mobile number – the one registered with the bank. Thus, the risk of cyber manipulation diminishes by leaps and bounds.

Figures representing usage of M-Wallets

India is a young country and the new generation is quite comfortable with mobile banking. With more of today’s teenager joining the banking and financial services system, the numbers are just going to explode | Source: RBI

Digital India Summit 2015 saw the discussion of the blurring boundaries between payments, marketing, and shopping services carried out through one’s mobile. These shifting boundaries require mechanisms that support change effectively. In this case, PhonePe goes one step forward to make itself as a viable option. How does it do that? – For one, it has increased the transaction limit. Most digital wallets allow you to spend money within a bracket of 20,000 rupees. By increasing the transaction limit to 30,00,000 rupees, it automatically becomes a repository of many possibilities in terms of marketing, and shopping and even paying bills. Even if most transactions that you carry out happens under the limit of 20,000; the idea that you have more funds to expend in situations of need proves to be a safety net.

Since your transaction is connected directly to the bank, it inevitably means two things: one, that you won’t be paying transaction charges that come with other e-wallets like Paytm. In fact, 31st December onwards, wallets will be susceptible to pay transactional charges. Two, as has been mentioned previously, there won’t be any need to pre-load money in your account.

There have been several instances, and I’m sure you’ll agree, when EVM machines in stores are unable to transact money and you find that money has been deducted from your current account. Although, your money is reverted back safely into your accounts, that period of waiting and confirmation is worrisome and anxiety-ridden. Moreover in some cases, the refund takes about a week’s worth of business days. It’s interesting to see how by directly linking your bank to your phone via an app, you’re making processes faster. Hence, you’re now acquainted with an instance where your money is refunded to your account automatically. It’s almost as if you’re saying good bye to a stress free life.

PhonePe aims to revolutionize digital payment systems in India. With such positive features aimed at faster, and more reliable processes, the future looks bright not just for the application itself, but also the future of E-commerce in India.

Why not download yourself and experience this awesome application? You can download it from the Google PlayStore here – https://play.google.com/store/apps/details?id=com.phonepe.app&hl=en

Featured Image Source: Fractal
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