One of the immediate fall outs of the demonetisation of Rs 500 and Rs 1000 notes would be a mushrooming growth in the number of non-bank players like Paytm and Free charge into the payment business, the Associated Chambers of Commerce and Industry of India (Assocham) said on Sunday citing a study.
Assocham said this would happen as more and more retailers in the goods and service value chain would be compelled to shift to non-cash modes for customer transactions.
The Assocham study found that while as many as 45 pre-paid payment instruments (PPI) players working as mobile and digital wallets have started offering services, it is only a handful of operators which have been aggressively ramping up and marketing their operations.
"However, the demonetisation has come about as a big opportunity for them. It is not only during this immediate cash crisis period that the PPIs would see a huge growth, but going forward also, the system would penetrate into the very small 'kirana' stores as well," Assocham Secretary General D.S. Rawat said in a press release.
Offering stored value service to the customers, non-bank PPI issuers are allowed by the Reserve Bank of India (RBI) to make transactions for purchase of goods and services besides remitting payments out of the mobile wallets.
"The wallet-to-wallet transactions would also see a big growth. It would not be a surprise if well-run road side 'dhabas' also start accepting bills through mobile wallet players," Rawat said.
"Given the thrust being given by the government to move towards the less-cash economy, the private sector PPIs is expected to invest lot more in product innovation and expand the reach through roping in both the customers and the merchants," he added.
Besides PPIs, other electronic transactions and services devices would be offered aggressively even by the banks, who are presently bearing the brunt of cash swapping, the chamber said.
According to RBI data, currently as many as 67 banks are offering mobile services to 120 million customers.
These players are using the increasing mobile density to offer the services through the hand set. Besides, the PPIs, other electronic transactions and services devices would be offered aggressively even by the banks, who are presently bearing the brunt of cash swapping, it said.
The banks would offer on an enhanced scale mobile banking services through SMS, USSD (Unstructured Supplementary Services Data) and applications (Apps). Presently, according to RBI data, as many as 67 banks are offering mobile services to 120 million customers. “This number is going to grow significantly,” the ASSOCHAM said.
With the launch of Unified Payments Interface (UPI customers can provide only a registered virtual address instead of details of bank accounts for making/receiving payments “However, the banks must use the App based UPI more aggressively as it can really be a game changer,” Mr Rawat said.