India leads the growth of smartphone adoption with 350 million net smartphone additions predicted by 2020, followed by China and Indonesia. It provides a huge opportunity for businesses who take a mobile-first approach to alternative payment methods and promote financial inclusion regardless of bank account or credit card penetration rates.
Mobile payments platform Tez only launched in India in September 2017 but is already eyeing up three other Asian markets and one other emerging market country for expansion.
Google-owned Tez is a mobile payments system that allows customers to pay for goods and services – from bills to street vendors – directly from their bank account. It competes with Alibaba-backed PayTM, an Indian digital payments and ecommerce company where customers top up virtual wallets for making payments via their mobile.
Both companies have enjoyed a period of rapid growth, thanks to a vibrant digital payments market. Smartphone usage exploded and when the Indian government revoked the two highest value notes as legal tender. 86% of cash was taken out of circulation prompting people to explore other payment options. According to the Reserve Bank of India, there were 262 million transactions using digital wallets in January 2017, up from 49 million the year before.
Like many other developing nations, India has relatively low credit card penetration and limited access to near-field communications systems – the technology required for Apple Pay, Google Pay and Samsung Pay. Across the Asia-Pacific region, smartphone adoption will increase from 48% of all connections now to 62% by 2020. For comparison, the developed world reached a mature level of smartphone adoption of 65% in 2016.
This creates a fertile market for providers offering alternative payment methods that meet customers’ specific needs.
Mobile-to-mobile payments, virtual wallets and Audio QR – where transactions take place between phones that are next to each other – mostly rely on people owning a bank account. For those that don’t, financial inclusion can be an illusion.
With consumers increasingly looking for alternative ways to pay for goods and services, Direct Carrier Billing (DCB) can be an attractive solution. It allows people to charge transactions directly to their mobile phone bill with as little as one click, completing bypassing the need for a credit card or even a bank account.
DCB is a quick and easy process that delivers a frictionless customer experience. It opens up the global market offering a suitable mobile payment opportunity to millions of customers and promoting financial inclusion along the way.