6 Updates From the Indian FinTech Space

  1. FreeCharge Launches P2P Payments in India

Mobile commerce platform FreeCharge has launched P2P payments through its new feature Chat and Pay. The feature enables person-to-person (P2P) and person-to-merchant (P2M) interfaces for digital payments.

The service will help customers to chat and pay in a secure way to friends, family and merchants in less than five seconds. It will also enable merchants to accept digital payments in less than a minute after registering on the FreeCharge app.

Govind Rajan, Chief Operating Officer at FreeCharge, said Our ambition at FreeCharge is to create a Payment OS for a Digital India. Today, we have taken a bold step in achieving this goal. Payments are often social; they are, in fact, a very human interaction. Chat N Pay brings this human emotion to payments, making them deeply engaging. We are confident Chat N Pay will accelerate the adoption of digital payments.

Chat and Pay will make digital payments ubiquitous in the offline space. Merchants can start accepting digital payments by just downloading the app at zero investment. The company aims to add five million merchants to its platform over the next 18 months as it expands its offerings for the customer. The company currently has over 30 million registered users in India and serves online and offline merchants like Shoppers Stop, McDonalds and Cinepolis.

  1. India Post Payments Bank to Be Launched in FY ‘17

Union Minister for Communications & IT, Ravi Shankar Prasad has reiterated his stance that the India Post Payments Banks would be launched by March 2017. At the Digital India Summit, Prasad had reported that India Post has enabled core banking solutions in 20,494 of its 25,000 offices and the remaining are expected to be upgraded by April. He had also added that the total number of ATMs has grown from four to 850 in the past two years and is expected to reach around 1,000 by mid-April. With its large network, India Post has been touted by many as the one to benefit the most from its payments bank license.

  1. RuPay Credit Cards to Issue 100,000 Cards by Sep. 2016

RuPay, the NPCI brand debit card which has reported to have increased its market share to 38% in the Indian debit card space, had announced that it targets to enter the credit card space by issuing 100,000 cards by September 2016. It also plans to issue 500,000 to 1 million credit cards every year from 2017. With its existing relationship with global brands – China Union Pay, Discover Financial Services, JCB Co. – the cards are expected to provide international transaction processing facility as well.

  1. Ola Acquires Mobile Payment Startup Qarth

Ola recently acquired the IIT Madras-incubated payments solution Qarth Technologies. The acquisition was made in order to strengthen its digital money app Ola Money.

Qarth Technologies, founded by Abhinav Srivastava and Prerit Srivastava, came up with a multi-bank IMPS solution. The solution provides you with an app called X-Pay for Android that integrates with 26 banks to allow its users to transfer funds between them.

"We are thrilled about the possibilities that emerge for our customers who use Ola Money across a wide range of merchants online and offline. With the acquisition of Qarth, we are also making significant technology investments to build forward-looking digital payment solutions for the ecosystem," said Pallav Singh, Senior Vice President and Head of Ola Money, in the press release.

The company is trying to explore different ventures through its application. Ola has already marked its presence into a food delivery service called Ola Café and an independent grocery-ordering app called Ola Store.

  1. Cholamandalam Quit Its Plans of Setting up Payment Bank

Cholamandalam Investment and Finance Company, the financial services arm of the Murugappa Group, has quit its plans of setting up a payments bank.

The company said that it would surrender the in-principle approval accorded by the Reserve Bank of India to its wholly-owned subsidiary Cholamandalam Distribution Services (CDSL) to establish a payments bank in the private sector.

The investment and finance company would not be proceeding with the capital infusion of Rs. 75 crore in CDSL approved for the purpose of establishing a payments bank. Cholamandalam was one of the 11 companies which were granted in-principle approval to payment bank by the RBI. The company operates through 534 branches with its net asset under management being around Rs. 25,000 crore.

  1. ICICI Bank Launches India's First Contactless Mobile Payment Solution

ICICI Bank unveiled the country’s first contactless mobile payment solution to enable its credit and debit customers make in-store contactless payments by just waving their smartphones near an NFC-enabled merchant terminal. The mobile payment solution available in the bank’s Pockets app provides improved convenience of Touch & Pay as customers are no longer required to carry physical card or cash to pay in stores.

ICICI Bank is the first financial institution in the country to leverage host card emulation (HCE) technology to bring forth this solution. HCE technology creates virtual cards for physical credit or debit cards (Visa/MasterCard) of the bank, as selected by the customer. The virtual card resides in the bank’s secure cloud server. Using the virtual cards, an ICICI Bank customer can initiate electronic payments from NFC-enabled smartphones by just waving his/her phone near a contactless merchant terminal. While the virtual card bears a different card number, the credit limit and expiry date remains same as the original physical card. The solution offers enhanced security as the customer’s card details are stored virtually in the bank’s secure cloud server and not on the customer’s mobile phone.

Rajiv Sabharwal, Executive Director at ICICI Bank, said, We have always leveraged technology to introduce digital innovations and provide world-class banking experience to our customers. Many of these were firsts in the industry like Internet, mobile, social media banking, contactless cards and a mobile wallet among others. We are delighted to introduce yet another first in the country – a contactless mobile payment solution that that will allow cashless payments using just smartphones, thereby eliminating the need to carry cash or debit and credit cards. With India becoming the second-largest market globally for mobile subscribers as well as smartphones, we expect this to be a big game changer in the Indian payment industry, as it will transform the smartphone into a virtual wallet. The key advantages of the solution are speed, simplicity and security. The speed of transactions will add momentum to cashless payments. At the same time, it will herald a shift from low-value cash payments to electronic payments at physical stores including quick-service restaurants and shopping marts where fast transactions are much required. Also, the level of security is higher since the card details are not shared during the transaction process.