Fintech in now starting in India (1/2)Move to mobile banking

This article is written by Mr. Koichiro Ohira , Chief Fellow, Institute for International Socio-Economic Studies（NEC Group）

Abolition of large valued bills

There are a lot of news and reports in Japan that Fintech (Fusion of Finance and ICT technology) is getting popular in China, but also in India with second largest population next to China the application of Fintech is now getting started. Among applications of Fintech the area showing the rapid change is the area of financial settlement or banking. The move is seen from settlement by cash to settlement by mobile devices using special application software for financial transaction or banking.
The trigger for this move in India was the abolition of large valued bills in November, 2016. At the initial stage after the abolition there was delay and problem to issue new bills, so, people were starting to use mobile banking.

One Stop
In India mobile banking service was offered mainly by start-up companies such as Paytm, MobiKwik, Freecharge. If we open the application software of Paytm which has the largest registered users in India, we can see a variety of function keys such as two-dimensional code reading function, payment for cable TV service charges or public service charges on the top screen. There are also other function keys such as booking and ticket purchase of airplane, bus, train, on-line shopping. The banking application service offers “one stop” function for all the necessary daily services and banking.

Many conventional banks have been offering mobile banking services also to confirm the account information and to make money transfer, but, recent move is that they are starting to offer mobile wallet.  Telecommunication operators are also offering to their mobile subscribers mobile banking services.

There are also the public authorities such as National Payment Corporation of India to promote the deployment of cashless banking services.

As explained above there are many parties who offer cashless banking service represented by mobile wallet. It is, however, noted that even Paytm who has the largest registered number of users in India have not come to the stage that their banking service is available at anywhere while the services of Chinese Alipay and WeChatPay mobile banking services are available almost anywhere.

Earlier settlement of key problems and issues is essential

The important point for wider spread of the service for financial and banking settlement is that the system and service is available commonly and in the same manner to users.
In India many different styles of banking services are available, thus making it difficult for users and shops to select services out of many similar services.
As a result they are regrettably back to the conventional way of settlement by CASH.

Other issue is the quality of communication service. Even in the big city like Mumbai the data communication is not stable and frequently cut off.
Many people may feel anxious about making mobile banking transaction under such unreliable communication environment.

Cashless society will be further progressed and enlarged in India only when these key problems and issues are settled accordingly.