Mobile payments: the way forward

Paymate has come up with a mobile application which facilitates swiping of cards on a customer’s phone at any POS. Ajay Adiseshann, Founder and MD, PayMate India delves into details of the application and how it will benefit a retailer and a customer.

Neha Malhotra (NM): How do Mobile payments benefit a retailer? Also what does it bring to a customer?

Ajay Adiseshan (AA): Only 500,000 or so retailers can accept electronic payments (only card payments). A vast majority of Indians carry mobile phones and almost every retailer has a mobile phone. On this basis, high penetration of cards, mobile phones present the ideal channel for retailers to move a large chunk of cash transactions to electronic. Taking cash out of the equation lowers the transaction cost, since the average cost of moving cash is 5 per cent at the least. Electronic payments would lower this cost significantly.

From a customers perspective, the mobile phone becomes a wallet, where customers can use a variety of payment instruments-prepaid, banking, credit card, etc on a single phone, and use it to pay online, in-store or remote. The sheer convenience of not having to carry cash makes is, an overarching benefit coupled. 

NM: How practical are mobile payments? 

AA: Practically every second Indian has a mobile phone. This makes it the most pervasive electronic device in India. India is largely a cash economy. As our economy continues to mature, many of these cash transactions will need to move to an electronic platform. The mobile as a payment tool makes the most logical sense, as this device is already in the hands of hundreds of millions of Indians.

NM: Does this take safety to another level for those who are skeptical of making online payments?

AA: Mobile payments have two factor authentication tools built in to make it a safer way to transact without exposing any sensitive details like card numbers, bank account numbers, etc. Mobile makes online payments even more secure for the above reason.

NM: Is the time needed to carry out transactions on a mobile equivalent to the time it takes otherwise?

AA: Mobile payments drastically reduce time to pay. For example, to make an online payment via card or netbanking you have to type in quite a few details. In case of a PayPOS transaction, you present your credit card or debit card, which is swiped on the phone using a card reader and you are done.

NM: Which all phones are compatible for this service?

AA: The application is currently available for android phones. Iphone, Blackberry and Nokia should be launching in the next 30-60 days. This is also available on Mobile Internet, so in essence any smartphone or feature phone could use PayPOS. 

NM: This application is being used across which retail categories? Which category will or makes most use of this application?

AA: PayPOS is useful for small businesses that don't qualify for POS terminals, individuals who are on the move and don't have an established physical presence. Also those involved in the home delivery segment where cash can be replaced by card can make use of this service. Mom and pop outlets which need a tool which goes beyond payments and helps manage their businesses more effectively can also use this.

NM: How will it help facilitate sales?

AA: Mobile payment gateway’s highlight the utility which will supplement sales and the retailer’s arsenal with additional modes of receiving payment from customers. A regular card swipe machine has a monthly rental and sometimes a huge signup fee and deposit, with PayPOS you do away with all this and the retailer has his savings.

NM: Going forward, what future do you see with respect with this application?

AA: PayPOS will reach out to the millions of small businesses and provide them a tool to accept payments electronically with no additional hardware requirement. This will help increase the penetration of POS exponentially in the coming years and move a significant amount of cash transactions to electronic.