Targeting the e-commerce market, India's mobile payments are on the fast track : Four Square Payments India

With the mobile payment market booming, more and more Indians are embracing this convenient way of transaction. The shift can be seen in the scene at a busy market in Mumbai, where shoppers make purchases by scanning QR codes from Paytm, a local mobile payment service provider.

Recently, mobile payments have gained significant popularity in India. Journalists have noted that many Indians are now using their smartphones to pay utility bills, book flights and complete transactions by scanning QR codes, which is particularly fashionable among the younger generation. This surge is attributed to the rapid growth of the mobile internet industry and strong government support. Internet technology giants are now setting their sights on the Indian market, vying for a slice of the growing mobile payments space.

Competition has been exceptionally fierce, with foreign companies taking a significant market share. Apart from several Chinese internet technology companies that were the first to enter the Indian market, major players such as Airtel, Amazon, Facebook, and local service Paytm have started competing for market share. Currently, foreign companies account for half of the market.

In mid-April, Amazon's online distribution service marked its entry into the Indian mobile wallet market by receiving a licence from the Reserve Bank of India for prepaid payment instruments. This licence allows Amazon's e-wallet to be used for both online and offline transactions.

The Times of India has reported that South Korean tech giant Samsung is planning to launch its mobile payment wallet Samsung Pay in the first half of this year.Samsung is exploring tie-ups with Indian credit card companies like Visa and MasterCard. With the introduction of Samsung Pay, competition on mobile payment platforms in India is expected to intensify. Samsung started testing the mobile service in India from December 2016 and recently released updates for its smartphones including the Samsung Pay app. However, Samsung Pay is only available for high-end Samsung smartphones, limiting its reach.

There are also reports that Japan's SoftBank plans to invest $1.9 billion in Paytm for a stake in the company's parent company 20%. SoftBank plans to invest $10 billion in India over the next decade. Truecaller, a Swiss instant messaging platform with 15 million Indian users, recently announced the launch of its mobile payment service.

Meanwhile, not to be outdone, Indian tech giants have been pouring into the mobile payments market to compete for their share. Ride-hailing platform Ola, e-commerce giants Flipkart and Snapdeal have all launched their respective mobile payments platforms.Airtel launched India's first payments bank late last year.

The Indian mobile payments industry is witnessing a trend: payments are shifting to mobile devices; the market for digital wallets and mobile banking is expanding; and digital wallets are integrating with point-of-sale terminals, said Prof Lal of Delhi University in an interview with this newspaper.

What factors are driving tech giants to focus on the Indian mobile payments market? Firstly, India has a very young demographic. In an interview with this reporter, Professor Parashuraman of the Tata Institute of Social Sciences said that about two-thirds of India's population is under the age of 35. This demographic group is the main buyer of smartphones and a potential customer base for the mobile payment market.

Second, unlike China's transition from the Internet era to the mobile Internet era, most Indian users jumped straight into the mobile Internet era. India has 374 million Internet users and 324 million mobile Internet users, the latter of which is expected to reach 550 million by 2020. Currently, more than 70% Indians own mobile devices such as laptops, tablets and smartphones. The transaction value of mobile payments reached Rs 1.7 trillion (about Rs 9.31 to a yuan) in March this year, triple that of the same period in 2016, according to the Reserve Bank of India. India is one of the fastest-growing e-commerce markets in the world. in 2016, the market value of mobile payments in India reached Rs 206 billion, which is 20 times more than in 2013. The online retail market has experienced exponential growth following the Indian government's ban on large currency notes.

Thirdly, the Government of India is actively promoting the Digital India initiative. The Government aims to make India a cashless society in the next 10 to 12 years. The Government has also introduced measures such as the National Payments Bank, the National Mobile Wallet and the Payment Services Bill. As early as 2008, the Reserve Bank of India had issued guidelines on mobile payments, identifying regulatory issues, technical and security standards, interoperability requirements and consumer protection measures.

The rapid growth of the Indian mobile payments market in recent years has been due in large part to Chinese companies, which have played a pioneering role and held a key position in the market.

Professor Kavi of the Department of Computer and Engineering at the Indian Institute of Technology, Mumbai, told the newspaper in an interview that China's top three Internet companies, Alibaba, Tencent and Baidu, have been aggressively expanding their presence in India over the past two years. Most recently, Reliance Capital, owned by Indian billionaire Ambani, transferred its stake in Paytm's parent company to Alibaba Group. With an investment of nearly $900 million, Alibaba Group is now the largest shareholder in Paytm's parent company, holding nearly half of the shares.

Tencent recently led a $1.4 billion investment in Flipkart, India's largest e-commerce platform. Hike, known as the "Indian version of WeChat", received a $175 million investment from Tencent in August last year. Analysts believe that Hike, which has 100 million registered users, is also ready to get a share of the mobile payment market. Baidu is also actively discussing investment in India's e-commerce and mobile payment markets.

Xiaomi founder Lei Jun recently said in India that the company's short-term goal is to capture half of the country's online smartphone market and achieve revenue of more than $1 billion last year. As Xiaomi continues to promote its "Internet Plus" model in India, it could set up a third smartphone factory in the country. Analysts believe Lei Jun may use Xiaomi smartphones to enter the Indian mobile payments market.

The Indian mobile payment market is expected to undergo rapid changes, said Wang Chao, Secretary General of China India Internet Industry Co-operation Alliance, in an interview with this reporter. China's Internet industry has accumulated advanced technology and experience in the field of mobile payment, and Chinese and Indian Internet companies can complement each other's strengths and show great opportunities for cooperation. He predicted that more Chinese companies will enter the Indian market in the next three to five years. (New Delhi, 2 May)