On 13-14 November 2018, APSCA India will organise Digital Payments South Asia at the LaLiT Mumbai.
The Question Everyone’s Asking
India’s payments industry is asking whether QR code mobile wallets and real-time mobile payments are the future of consumer payments and the key to driving e-payments acceptance. Fintechs, banks and even transport operators are aiming to leverage the simplicity and flexibility of mobile QR codes and the national real-time payments infrastructure. Although this may have been triggered by QR code payments in China, mobile payments in India is on a different and more innovative roadmap.
Card Payments or Real-Time Payments
Contactless payments are faster and more efficient than cash. EMV specifications enable proven security and international interoperability; contactless payment cards are the future of card payments at merchants and are becoming accepted by transport authorities for open-loop transit payments. But mobile real-time payments are growing faster than card payments in India today. How will these different consumer payments systems co-exist in the future?
Both mobile real-time payments and contactless card payments support the objectives of the payments industry to expand e-payments by displacing cash for low value transactions. But which is likely to have a greater impact on the adoption of e-payments in India? From the perspective of customers, merchants and payment product providers, how will contactless payments fit with mobile payments and which approach is more likely to succeed in democratising e-payments?
A technology exposition of latest solutions for e-payments business, including mobile, proximity, QR and contactless solutions, will be held concurrently with the Digital Payments South Asia Conference. The exposition will enable decision-makers from regulators, payment schemes, banks, e-payments companies and retailers to learn of the latest solutions for mobile-based, contactless and digital consumer payments.
Mobile Payments Solved?
For more than 10 years the global payments industry has struggled to achieve success with mobile payments with only lacklustre results. Today over 520 million1 mobile QR code payments users in China suggest one solution. But India is driving innovation on a broader scale by enabling real-time payments interoperability across all payments service providers from any mobile device. Unified Payments Interface (UPI) supports P2P, P2M, online and off-line commerce, and transfers between any accounts on the nationwide infrastructure. Is this the future of mobile payments?
1 - http://www.ecns.cn/business/2018/02-05/291541.shtml
Digital IDs, Virtual Payment Addresses, QR Codes
The Unified Payments Interface (UPI) uses the national digital identity infrastructure (Aadhaar) to authenticate payers and payees at any PSPs and then provides access to any of their payments accounts located anywhere on the UPI infrastructure (even accounts at different PSPs). The details of payers and payees are provided using simplified virtual payment addresses or QR codes. All of this is provided through a mobile payments interface that converges online and off-line e-payments into an integrated digital payments ecosystem.
No Push without Pull?
Offline mobile QR code payments in India are usually push payments (customers scan a merchant-presented QR code) that are not quick or convenient. China’s success with mobile QR codes was driven by pull payments (consumer-presented QR codes) which approach the ease-of-use and speed of mobile NFC payments. Pull payments are also important in driving online P2P and P2M mobile payments. Will mobile QR code payments fly in India with only half the customer proposition?
Interoperability for Mobile Wallets
Upcoming regulatory guidelines are expected to first enable interoperability between KYC-compliant prepaid payment instruments (PPIs) including mobile wallets, and later interoperability between PPIs and banks. Mobile wallet operators have been requesting to be able to access merchant payments over an interoperable network based on the same MDR and interchange framework as banks. How will such a proposed interoperable framework impact India’s retail payments business?
Success with Contactless Payments
Adoption and usage of EMV contactless payment cards is creating convenience for consumers and business efficiencies for merchants. They are expanding e-payments by displacing cash for low value transactions. EMV contactless cards are faster and easier to use than QR code mobile payments and their acceptance in public transport ticketing could expand the opportunity still further. But will they only be successful in markets where card payments are mature? Does that include India?
What's Next for Mobile NFC Payments?
Mobile NFC payments look disappointing so far. In markets where customers enthusiastically adopt EMV contactless cards they remain ambivalent about the “Pays” and HCE-based mobile apps are less popular. Mobile NFC is an efficient payment method at the point-of-sale but, unlike QR codes, has not been successfully implemented for P2P transactions and does not support online commerce. Without P2P and online, is there a long-term future for mobile NFC payments?
Avoiding Fragmentation in Mobile Payments
The homogeneity of interoperable EMV mobile NFC payments avoids fragmentation for merchants leaving customers to select products based on service. If all banks and fintech companies in India launch mobile real-time mobile payments products then, even with interoperable QR code payments standards, could the resulting fragmentation create obstacles for merchants and customers? How do we manage the fragmentation and competition that looks likely to emerge?
APSCA is inviting regulators, national payments networks, international payment systems, banks, fintech companies, payment services providers, merchants and leading payments solutions providers to attend Digital Payments South Asia. Invitations will be sent through national banking associations, national payments networks and industry associations.
Digital Payments South Asia is a new and groundbreaking industry event focused on the future of payments in South Asia and specifically, the question that all consumer payments professionals are asking today; which of the two approaches to retail payments now attracting attention in Asia - fintech or card-based payments - will achieve the greatest success in expanding the e-payments business? All payments professionals whose business depends on driving e-payments adoption and expanding e-payments acceptance should attend.
Director - APSCA India