1. UPI will make Paytm, ICICI Bank’s Pockets, HDFC Bank’s Chillr redundant: Centrum

UPI will make Paytm, ICICI Bank’s Pockets, HDFC Bank’s Chillr redundant: Centrum

The ongoing push by the Reserve Bank of India (RBI) to revolutionise banking through the Unified Payments Interface (UPI) will leave mobile wallets redundant, as mobile banking has jumped over threefold in February from the year-ago period, according to a report.

By: | Updated: May 8, 2016 9:01 PM
sbi mobile wallet The report, by city-based Centrum Broking, stated that mobile wallet services like SBI’s Buddy, ICICI Bank’s Pockets, HDFC Bank’s Chillr and standalone operator Paytm will be redundant with the massive adoption of the UPI.

The ongoing push by the Reserve Bank of India (RBI) to revolutionise banking through the Unified Payments Interface (UPI) will leave mobile wallets redundant, as mobile banking has jumped over threefold in February from the year-ago period, according to a report.

The report, by city-based Centrum Broking, stated that mobile wallet services like SBI’s Buddy, ICICI Bank’s Pockets, HDFC Bank’s Chillr and standalone operator Paytm will be redundant with the massive adoption of the UPI.

“Mobile banking has taken the country by storm, growing by 212 per cent growth in value terms in February 2016 over the same period in 2015 and by 131 per cent in volume.

“If the UPI adoption continues mobile wallets like SBI’s Buddy, ICICI Bank’s Pockets, HDFC Bank’s Chillr and Paytm will be redundant,” a Centrum Broking said in a report titled- ‘Banking Transactions – Technological Disruption’.

The report attributed the RBI push to adopt UPI as an effort to lower the cash economy. Quoting RBI data, the report said the cash floating in the system is about 18 per cent of the GDP, making the country one of the most cash-dependent economies in the world.

“The RBI wants to cut down on cash dependence and the UPI has been brought in to do just that. It will reduce the effort, time and cost incurred on simple transactions, below Rs 1 lakh. Through UPI, two or three bank accounts can be linked and therefore any payment/withdrawal can then be done by just sending a message on this app,” the report said.

UPI does not require a specific bank account unlike existing players which offer the product to only those who have an account with them, thus significantly increasing the pool of customers UPI could tap into, compared to banks which have a limited universe of customers.

Of the 29 banks that have already tied up with the RBI-promoted National Payments Corporation that launched the UPI, 10 banks — Federal Bank, Axis Bank, Ratnakar Bank, Yes Bank, Oriental Bank of Commerce, Union Bank, ICICI Bank, HDFC Bank, PNB and Canara Bank — are ready with their apps.

According to a World Bank report, only 53 per cent of the Indian population or 636 million people have bank accounts, while close over 1,000 million have mobile phones. If used to its full potential, UPI can penetrate far more homes than all the mobile wallets put together, the report said.

It is quite likely that to stay relevant in the market and operate on a low-cost model, banks and other financial service providers will have to go through a drastic digital makeover. Those who are left behind in this race might struggle to survive, it added.

Quoting the Reserve Bank data, the report noted that the value of mobile banking transactions rose 46 per cent in December 2015 from a month ago. But this is more than 300 per cent growth compared to December 2014 level, it said.

  1. V
    Vaibhav Sharma
    May 9, 2016 at 6:47 pm
    Also, UPI remains a platform available for a centralised use. Wherein the banks have to subscribe to the services and use what is available. At Chillr, our USP remains in making customised offerings available to Banks as per their target audiences as we do a deep integration with the Bank's mobile banking platforms.
    Reply
    1. A
      Aditya
      May 9, 2016 at 3:03 am
      The article both from Financial Express and Centrum lacks depth and understanding of the on-ground electronic retail scenario. It seems to borrow from various prior media reports to form an opinion which can be given a sensational headline!
      Reply
      1. B
        bbcnjfhgj
        Nov 1, 2016 at 12:17 pm
        nbv kjkjb
        Reply
        1. Sony Joy
          May 9, 2016 at 7:44 am
          Factual corrections:a) Chillr is not a wallet & does not hold customer's money at any point in time! In fact like UPI, Chillr also rides on IMPS as its backbone.b) Chillr is not an HDFC Bank product. We are live with 7 banks already and another half a dozen banks under integration.c) The core capability of UPI to send money without having to know the beneficiary's account details, is already something that has been live on Chillr since February 2015.
          Reply

          Go to Top