October 30, 2013
MMID based interbank mobile payment system has huge promise in India. A country that is witnessing a payments revolution led by both start-ups, private banks, telcos as well as government backed National Payment council of India. NPCI has a payment gateway called Rupay which has one of the lowest interchange and transaction processing rates in the world. But whats most exciting is the Mobile payment platform. Mobile money identifier (MMID) is an authentication id that was initially used to offer mobile based interbank mobile payment system but now extends beyond it. You can use it to transfer money to a bank account to a person who doesn't have MMID, by using another system widely in use for online payments - NEFT. Back in August, 2013 the team @ Lets Talk Payments had written about MMID, IMPS and its rise and usage in India. If we look at the numbers today, MMID has started showing its true colors. You can refer to the recent numbers posted by NPCI here.
Statistics as they say tells you only half the story. While lot of bloggers say that IMPS numbers look low, payment experts believe its just the beginning and it has the potential to grow to epic proportions. Stats indicate that cumulative number of transactions have grown from 700,000 to over a million in 2 months time. Though there has been an addition of only a single bank in over 2 months but more than 50 banks are already onboard. Top 3 leading MMID issuers include ICICI Bank, Axis Bank and SBI. During this phase 94.7 Mn MMID’s have been issued (that is more than population of several countries) and the total transaction numbers have gone up by around 400,000. If we do the math, the issuance to usage rate in the period of these 2 months has been less than 0.5% but the transaction value is growing.
Have a look at the updated transaction value chart compiled by our team for reference:
Data Source: NPCI
Some of the recent developments which could help fuel the growth story of IMPS include:
Some of the reasons which may impact the adoption rate of IMPS service in short term include:
LTP view: In countries like USA, carriers/banks/tech firms and startups are competing against each other and leading to fragmentation in the market. But can developing countries afford such scenario? Do we have companies that are innovating from scratch for India? While India might or might not be able to replicate the success of mPesa but one thing it can learn from it is that there is a merit in coming together and supporting/promoting a national program like IMPS's MMID. We don't need an ISIS versus google wallet versus Paypal beacons situation, or do we?
Updated: 6:30AM EST.