Instamojo Payment Gateway: What are the payment options available in India?

The Indian e-commerce industry is experiencing rapid growth, attracting more and more foreign merchants. However, many businesses have currently only scratched the surface of the potential profitability of the Indian market. A major factor hindering their growth is the inadequacy of user payment methods. Currently, only 23% international credit cards are used for online e-commerce transactions in India. Other payment methods, such as digital wallets, cash or bank transfers, make up the bulk of e-commerce payments. Merchants should not only look at the share of payment methods but also the growth rate of each method. This is exactly why UPI (Unified Payment Interface) grew 25 times year-on-year last year, drawing a lot of interest from merchants intending to expand into the Indian market. But there's more. Look at the numbers: 53% of India's population has a bank account, far exceeding the market reach of digital wallets. in April 2018, the UPI interface processed 900 million transactions. Six months later, in October 2018, the number of monthly transactions increased to 482 million.The value of transactions in April 2018 was Rs 38 billion. By October, the same calculation showed an amount of Rs 107 billion.

What is UPI?

The Unified Payment Interface (UPI) is a real-time payment system developed by NPCI, the umbrella organisation for the operation of retail payment and settlement systems in India, which enables inter-bank transactions.UPI can be thought of as a "money email account". Banks use it as a unique identifier to transfer funds to merchants or other banks. It uses a virtual payment address (VPA) - for example, john@icicibank - as the unique account that identifies the user and makes the payment.UPI truly democratises digital payments in India, and the best part is that anyone with a bank account can use it. bank account can use it.

Why do end users choose UPI?

- 24/7/365 Service: UPI offers 24/7 service.

- Ease of use: no need to enter payment or account details - just accept the payment request displayed on the screen.

- Users can store all their bank accounts under one account.

- Safe and secure: no need to share credentials - just use a virtual account (VPA).

- It is more difficult for criminals to gain access because the interface uses two-factor authentication (2FA).

- UPI offers 100% mobile-first experience: NPCI envisages its specific payment scenario on mobile devices. This is a mobile app-based service that allows users to make UPI payments using the Universal BHIM app (developed by NPCI) or their own banking app.

Customer Experience Process

Difference between UPI and Internet Banking

You might have also heard of online banking in India. So what's the difference between the two? While both rely on bank transfers as a mechanism, UPI is designed as a mobile-first solution and is more mobile-friendly: it connects to all banking apps through something like an email account (i.e. john@icicibank) rather than a bank account (e.g. online banking), making it more convenient. It comes pre-filled with all the necessary payment information.

UPI Lite will be enabled on the BHIM app for small transactions of up to Rs. 200 using the Device Wallet. Users can deposit up to Rs 2,000 into the wallet at any given time.

If you are tired of using UPI PIN multiple times a day for very small payments, UPI Lite could be your saviour. Reserve Bank of India Governor Shaktikanta Das has launched a new service for citizens called 'UPI Lite'. It allows users to make small transactions of up to Rs 200 without using UPI PIN, almost offline.

This feature will be enabled on the BHIM application and can be used for small transactions using a "device wallet". It may be similar to other wallets in the market. You can deposit up to Rs. 2000 into the wallet at any given time.

The service will have a UPI Lite balance, which is a virtual "device wallet" balance that users can enable from their account for UPI Lite transactions.

Customers of the following eight banks will be able to use the UPI Lite payment system: State Bank of India (SBI), Union Bank, Utkarsh Small Finance Bank, Canara Bank, HDFC Bank, Indian Bank, Kotak Mahindra Bank and Punjab National Bank.

Reduces the stress of repeatedly entering UPI PINs.

Transactions can be made even when there is no internet connection.

UPI Lite allows transactions up to Rs 200.

Users can deposit up to Rs. 2000 into UPI wallet at any given time.

You can only enable UPI Lite for a single account in an application.

UPI conducts 90% transactions for less than Rs 200. This will reduce the burden on bank debit cards and make the process easier and smoother. The volume of failed transactions is also likely to be reduced.

Digital payment solutions provider MobiKwik has raised Rs 350 crore in debt financing from Blacksoil Capital. The Gurugram-based company raised this debt funding after filing a DRHP with SEBI for over 12 months.

The MobiKwick board has passed a resolution to issue 700 non-convertible debentures (NCDs) at an issue price of Rs 5 each to raise Rs 350 crore, according to a regulatory filing with the ROC.

MobiKwick has reportedly delayed its IPO due to poor market conditions and is now looking to raise $100 million. The company had previously raised $20 million in June 2021 from the Abu Dhabi Investment Authority (ADIA).

While MobiKwick was valued at about $7.36 billion in the last funding round, it reached $10 billion in the second round (ESOP sale).

MobiKwick has filed a DRHP with SEBI to raise Rs 190 crore through an IPO. However, many startups, especially fintechs, are waiting for the right time to go public due to the failure of the Paytm IPO and poor performance of companies like Zomato.

The Reserve Bank of India has rejected the applications of 100 fintech companies that do not meet the eligibility criteria for payment aggregators and payment gateways.MobiKwick is one of them. The apex banking institution rejected the payment licence of MobiKwick's flagship product Zaakpay as it did not meet the net worth requirement and was offering gateway services to facilitate cryptocurrency transactions.

MobiKwick is yet to file its financial statements for FY22, but the company's operating income declined by 19.61 TP3T to Rs 288.6 crore in FY21. During the same period, the company also suffered a loss of Rs 11.1 crore. The company generates revenue from three main areas: consumer payments business, payment gateways and buy now pay later (BNPL).

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Unified Payment Interface (UPI).

The Unified Payment Interface (UPI) allows all bank account holders to make online and offline payments via smartphones without the need to enter credit card details, IFSC codes or internet banking user IDs/passwords.

All users need to do is create a Virtual Payment Address (VPA) of their choice as their financial address and associate it with their bank account.

Now, in order to promote the adoption of UPI as a digital transaction tool, the Government of India has recently launched a digital payment application called Bharat Interface for Money (BHIM).

The new digital payments app, which is tipped to be a game changer for India's cashless payment system, is currently only available for download on the Google Play shop, meaning iOS users will have to wait a while.

BHIM is associated with over 30 private and state sector banks including State Bank of India (SBI), Axis Bank, HDFC Bank, ICICI Bank, IDBI, Union Bank of India (UBI) and Kotak Mahindra.

BHIM is so popular in China that the UPI-based payment app has been downloaded more than 3 million times on the Google Play shop. According to Amitabh Kant, CEO, NITI Aayog, people have completed over 5 million transactions using the app.

Developed by National Payments Corporation of India (NPCI), the UPI-based app connects your registered mobile number and smartphone to your bank account for safe, secure and cashless transactions.

The app should also support Aadhaar-based payments, which will allow users to transact using fingerprint impressions, but this feature is yet to be rolled out in the latest version.

Here's how to download and set up the BHIM application:

Setting up BHIM on a mobile device takes only seconds.

1. Simply download BHIM from the Google Play Store, select the language and click the next button several times.

2. The application will then request a text message to verify that your phone number is registered with your bank account.

3. By sending a message to the server, the application will automatically validate your phone number using your unique IMEI number in a few seconds.

4. Once authentication is complete, the BHIM application will ask you for a four-digit PIN, which is required to log into the application and authorise transactions.

Note - not to be confused, this four-digit PIN is not your UPI PIN; it is simply the password that locks the BHIM application.

5. The BHIM application will now display a list of banks. You just need to select your bank and the application will automatically retrieve all the details of your bank account using your phone number.

6. the app quickly recognises my HDFC Bank. just click on your account and you can link your bank account to the Bhim UPI Payment app.

Note - Currently, BHIM only supports linking to one bank. If you want to link another bank account, you can go to the main menu, select Bank Accounts, and then select your default account.

7. Once you have completed the setup, you can start accepting and sending payments using the UPI payment interface.

How to set or reset the UPI PIN in the BHIM application

The UPI-PIN is the 4-6 digit password required to authorise transactions.

If you have set up a UPI-PIN in another UPI application, you can use the same PIN in the BHIM application or reset the UPI PIN by providing your 6-digit card number and card expiry date or by providing an existing PIN and confirming the new PIN twice.

Note - Please do not share your UPI-PIN with anyone.BHIM does not store or read your UPI-PIN information and your bank's customer support department will not ask you for this information.

How to send and receive payments in BHIM applications

On the home screen, the app has three options: send funds, request funds, and scan and pay.

Send funds:

Click the Send icon.

Enter the payee's mobile phone number or Virtual Payment Address (VPA). (If you want to transfer funds directly to your bank account using the IFSC code, click on the three-dot menu in the upper right corner)

Enter the amount and notes.

Finally, enter your UPI-PIN and continue, and that's it.

Receive funds:

Click the Receive icon.

Enter the recipient's mobile phone number or the virtual payment address of the person you want to receive funds from.

Enter the amount and notes and submit.

The payer will be notified that they can accept or reject the payment.

For the safety of the user, BHIM will automatically log off the user if the application is closed or has not been used for an extended period of time.

BHIM is different from other online wallets like Paytm and MobiKwick. For transferring money to anyone using BHIM, the payer does not necessarily need to use the BHIM app; they only need a bank account to receive the payment.

However, with online wallets like Paytm and MobiKwick, you can only send funds to people using the same online wallet.

UPI stands for Unified Payment Interface and means Unified Payment Interface, a real-time payment system launched by the National Payments Corporation of India (NPCI) in 2016.

UPI aggregates most of the domestic banking channels and third-party payment platform channels in India, including PhonePe, Paytm, BHIM app, MobiKwick, Google Pay, Uber, Chillr, Paytm Payments Bank, SBI Pay, iMobile, Axis Pay, Bank of Baroda (BOB) UPI and other bank apps or e-wallets that support UPI payments.

Prior to the launch of UPI, the official payment service platform provided by the Indian government was IMPS (Instant Payment Service), in which consumers had to provide information such as their bank card number, account name, and IFSC code (Indian Financial System Code) to complete the transfer process.

UPI consolidates all this tedious information into a single string ID, where the consumer simply fills in their ID (which can be a person's name, ID number, mobile number, email, etc.) and all payments are instant and 24/7.

UPI registration process: After downloading the application that supports UPI, enter your bank account to register (you need to verify the registered mobile phone number), then set your UPI account and password to bind your bank account to UPI.

As of 2022, UPI has processed over 4,500 crore transactions totalling over Rs 8.3 lakh crore.

Payment Type: Online Bank Transfer Supported Currencies: INR, USD Applicable Industries: E-commerce, Gaming, Virtual Deposit Time: Real-time Deposit Minimum Single Transaction Limit: 1 INR Maximum Single Transaction Limit: 30,000 INR Support for Declined Payments: Support for Declined Payments Fee: 10 USD/transaction Support for Refunds: Support for Refunds Fee: 1 USD/transaction Covered Regions/Countries: 1 Country India

Compiled and edited by Payssion, a global provider of local payment services, please cite the source for reproduction.

Most Stable Indian Payment Channels by 2023

State Bank: one of the largest banks in India offering various payment services.

Bank of India: one of the earliest banks established in India and one of the banks owned by the Government of India, with extensive experience in the field of payments.

ICICI BANK: One of the largest private banks in India, leading in payments and e-banking services.

HDFC BANK: One of India's leading private banks with strong presence in e-banking and payment services.

Axis Bank: one of India's leading private banks offering comprehensive payment services.

Bank Accounts: The payment system in India begins with bank accounts. A bank account is an account opened by an individual or a business with a bank for deposits, withdrawals and transfers.

India's Quick Payment Service (IMPS): IMPS is an instant payment solution launched in India that allows users to make payments and transfers to their bank accounts in real time via their mobile devices.Launched in 2010, IMPS was originally initiated by the National Payments Corporation of India with the aim of providing a convenient, fast, and secure way to make payments.

Unified Payment Interface (UPI) : UPI is a mobile payment system launched by National Payments Corporation of India (NPCI) in 2016.UPI allows users to make real-time payments and transfers between bank accounts directly through mobile apps without having to provide each other's bank account numbers. Users can easily make payments by simply setting up a Virtual Payment Address (VPA) and connecting it to their bank account.

Prepaid Card: A prepaid card is a pre-loaded card that can be used at multiple merchants without the need for a bank account or credit card.

Mobile Wallet: A mobile wallet is a digital wallet that can be used for making payments, transferring money and storing funds. The growth of mobile wallets in India has been fuelled by the popularity of smartphones and the growth of the mobile internet, which allows users to make fast, secure and convenient payments through apps.

The growth of these payment methods in India has been fuelled by the promotion and innovation by the Government of India and payment organisations aimed at increasing financial inclusion, promoting economic development and facilitating payment and transfer operations for users.

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Warren Buffett, known as the "Prophet of Omaha", has been at the forefront of the global investment community with his precise investment vision and superior performance. However, his recent major setback in India is a reminder of the risks of investing abroad.

Under Warren Buffett, Berkshire Hathaway invested in Paytm, India's largest digital payments company, in 2018 at a cost of Rs 1,279.7 per share for a total investment of $260 million. However, unfortunately, in November 2023, Berkshire Hathaway sold its 2.5% stake in Paytm at Rs 877.29 per share, totalling $164 million. This means Buffett lost 311 TP3T per share.

So why do Buffett's investments fail? The following reasons deserve our attention:

- Paytm is overvalued: according to the data, Paytm was valued at $10 billion in 2018. At that time, the company's revenue