Mobile Payments Adoption in India

In the global goal of inclusive and sustainable growth, financial inclusion and access are broadly recognized to be key steps toward it. Without a doubt, technology has been playing a pivotal role in expediting and accelerating this revolutionary progress. One of the recent ways we have seen this take-off is through a massive mobile payments app adoption.

Many countries have taken the major step in having technology at the forefront of their economic growth. China is a prime example in leading and developing digital financial services across its population. In 2021, it is projected that more than half a billion people in the country shall pay through their phones at a point-of-sale.

This means that China’s booming payment apps market has opened up payment convenience and payment solutions to both physical and online stores at a penetration rate of 39.5 percent. Adopting a mobile payment app approach has been done by many shopkeepers, restaurateurs, and e-commerce platforms. To this effect, small businesses have massively benefitted as businesses move directly from cash to payment apps.

However, with 1.7 billion people remaining unbanked, financial inclusivity continues to be a major challenge across emerging markets and institutions. In a recent Statista report, one of the emerging countries that are gaining momentum and penetration rate on adopting a mobile and digital future is India:

Source: Statista Digital Market Outlook

India’s high user-app penetration rate on mobile point-of-sale

Among emerging and developing countries in Asia, India has always had high payment app penetration levels above the world average. While average spendings per consumer remain low with only a casual usage of these mobile apps, this still suggests that India has a ripe population to a potential digital payments economy.

India is a country known for its incredibly diverse population. This diversity is also seen in the types of mobile apps that are popular in the country such as e-commerce, entertainment, and travel apps. There are several factors that have contributed to this growth including an increase in smartphone users, improved internet connectivity, and the growth of startups in the country.

Despite this growth, there are still some challenges that need to be addressed. One of these is the lack of standardization in the app development process. This can lead to fragmentation and a lack of interoperability among apps. Another challenge is the low penetration of credit cards and digital payments. This makes it difficult for companies to monetize their apps. However, these challenges won’t last any longer.

More people in India would eventually adopt mobile apps, making concerns about fragmentation and lack of interoperability become less of a hindrance. Both Indian users and entrepreneurs would begin looking towards digital payments and app solutions. Eventually, B2B struggles will exponentially decrease as more payment solutions will allow businesses to successfully launch more local forms of payment methods to unlock untapped markets in India.

All these reasons point to India as a country that is ready to accelerate its mobile app and digital payment growth as more users and merchants alike adopt this practice in the years to come.

 

Mobile app adoption statistics of India in 2021

A key reason why the Indian economy remains fertile for digital advancements is that its mobile app industry is expected to reach a value of Rs 2.3 lakh crore by 2021. Assessing to be one of the largest and most profitable global markets, there are over 1.12 billion mobile phone subscribers since 2016. This is out of a population of 1.32 billion which makes India leading in the subscription penetration rate of 98 percent.

India has the world’s third-largest mobile network coverage, with approximately 90 percent of the geographical area covered by mobile signal coverage. The country has witnessed a phenomenal growth in mobile data consumption, with average monthly consumption per user surging to 9.8GB in 2016 that is expected to reach 24GB by 2021.  Even its e-commerce industry remains flourishing exponentially.The strong uptake of smartphones and increasing mobile data consumption are the main drivers for this growth.

 

The launching of the Digital India Program

More than an organic shift towards a digital future, the Government of India has also launched the Digital India program since 2015 to transform India into a digitally empowered society and knowledge economy. The ambitious initiative aims towards e-governance, connecting rural communities with cloud services, broadband highways, public internet access programs, and digital literacy missions.

On this backdrop, it is estimated that the number of mobile users in the country will rise to 1.22 billion by 2021, an increase of 21% from the end of 2017. Despite this growth, India’s mobile market is still at a nascent stage. The expected penetration rate for smart devices in 2017 is estimated to be 28%, as compared to over 80% in markets such as the US and China.

This means that these statistics shall only increase from here onwards, with combined efforts and initiatives from the Indian Government, consumers, and businesses. This will offer larger curves and potential for growth in the Indian mobile and payments market once more b2b payments solutions bridge the gap and struggles among Indian localities and regions.

 

The future of mobile payments and app adoption for India

The global mobile economy is booming and is estimated to be worth $3.3 trillion dollars entering into 2022. With the penetration of high-speed networks and affordable smartphones, consumers’ appetite for digital content and convenience has increased exponentially. India has among the highest number of internet users in the world. Over 80% of this internet usage is through mobile phones.

As India’s mobile app market reaches and crosses $3.4 billion in 2020, a report from Strategy Analytics project that revenue from mobile apps will jump tenfold over the next five years, reaching $10 million (Rs 66 crore) per day and exceeding Rs 2.2 trillion (US$33 billion).

The Indian mobile app economy is still in its early profitability stage and has rich potentials to grow significantly over the next few years. Research director at Strategy Analytics Neil Shah projects that the average Indian consumer in-app spendings shall only increase, driven by the high availability of affordable smartphones and data plans with huge explorations on newer business models like paid apps and advertising. In turn, this will revolutionize the country into a tech-centric economy.

This is one of the ripest periods for global businesses to enter the Indian economy and unlock untapped regional markets in the emerging country. This can be effectively reached through utilizing digital payments solutions that will allow interoperability across apps and provide people of India access to more accessible e-payment methods. Soon enough, India could potentially pivot towards a massive mobile payment app adoption next to China.

The PayFuture team is committed to producing Economic and Financial Technology content. In this journey towards information, we envision the world to become more aware of digital payments and innovations that may change the future.

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Why Fintech Startups Set Eyes on Africa

The Africa fintech startup scene experiences unprecedented growth due to an influx of foreign investments. In fact, the market is under the surveillance of many fintech investors and for the right reasons.

 

Generally, fintech ventures are hoping to pioneer an innovative ecosystem up for adoption. Africa records having a digital-savvy young population. Yet despite this, it was lagging behind other emerging markets in venture capital activities.

 

At present, however, the market is witnessing an impressive acceleration in investments in the past months. According to Disrupt Africa, startups in Africa secured about $330 million in funding in early 2021. This recorded number is double the fund raised from 2020, with more forecasted to come.

Source: Quartz.com

 

‘Africa is a Blank Slate’

 

Africa is an ideal market because of its rawness. Pierre Shurcke, Partner at European growth investor from TempoCap exclaimed: “Africa is almost like a blank canvas that VCs and startups can build on. We’re going to see a quantum leap in the development of [the] ecosystem and there’s a great amount of opportunity for really strong returns.”

 

Pierre also explained why VCs outside African refrained from entering the market before. He said high geopolitical issues, currency-related risks, and the geographical nature of the continent have some way or another raised red flags.

 

But now, things have started to change. After recent success stories proliferating the media are enticing more investors in the African fintech market. Not to mention that the size of the market can relatively constitute the size of the opportunity.

 

Investors Magnets: Valuations and Success Stories in Africa

 

Valuations given to African companies clearly draw in more foreign investors. Furthermore, success stories draw VCs in the market. Compared to the US and Europe where prices skyrocket, Africa is a greenfield with a large opportunity to grow. Hence, the market tends to attract more risk-taking investors.

 

Last March 2021, Nigeria-born payments startup Flutterwave attained unicorn status in March with a $170 million round, PitchBook data. This valuation has made the continent more attractive.

 

Some other VCs investing in the region are Japan’s Uncovered Fund, which reportedly launched a $15 million drive in February to back early-stage African startups. Then, we have USA-based Tiger Global backing microfinance startup FairMoney. As per TechCrunch, Valar Ventures and Target Global lead the $55 million series B funding for bank Kuda that has a $500 million valuation.

 

African Fintech Startups: A Bright Future Ahead

There’s a lot of innovative local startups solving true-to-life struggles. What these startups offering has a real use case usually necessary for the community’s growth. More importantly, the solution is aiming to serve a huge chunk of the population.  

 

Johan Bosini of Quona Capital remarks. “There is now real evidence of appetite from larger investors, which has led to more confidence in the ecosystem and unlocked a lot more local capital and expertise, further fueling growth.”

 

Though African startups classify as high-risk-and-high-reward investments, many investors are following suit. Of note, the firms entering the market early may have the upper hand. Most likely as they reap stellar returns as the ecosystem grows into adoption.

 

Global Payments

Utilisation of the Payfuture gateway facilitates a merchant’s rapid growth in new emerging markets, all with one simple API integration. Our system allows customers to move into growth countries, manage fraud and risk. Using our AI machine learning technology a customer’s journey becomes seamless as the payment page is modified depending on their country and its specific local payment options. This ensures that our merchants receive the highest customer conversions no matter which country their clients are paying from.

Ecommerce

Ecommerce Payments have never been so convenient. PayFuture’s difference is that we have built our technology around ensuring that we are reducing our ecommerce merchant’s load times and therefore reducing payment abandonment. We also offer one of the largest varieties of payment options for our ecommerce merchants

6% abandon due to a lack of payment options.4% abandon due to technical issues4% abandon due to poor payment experience

PF’s connector gateway alleviates all of these issues.

Transaction Optimisation

PayFuture has a team of transaction monitoring experts who continuously follow our merchant’s traffic flow 24/7 -365 days a year. This team aims to make sure no transaction disruption occurs and even in peak periods transactions are optimised for minimal customer declines or drop offs. Our unique conversion recovery solution works in real-time to identify when a client may abandon a sale, allowing our automated chatbots and the merchant’s customer service/call centre the opportunity to re-engage before they abandon the site. This alone is huge since it offers the ability to convert a lost sale into a potential success. Finally, we offer a function where if the chosen payment option is declined then the system will have the option to automatically offer the customer an attempt at another local payment type.

Data Rich Reporting

For a business to expand into new emerging regions, having the correct data in real-time assists in understanding customer trends in terms of their payment habits per each country. PayFuture has created a simple to use payment platform interface ensuring detailed data rich reporting functionality with a few simple clicks. By offering powerful payments data, insight and analysis we enable instantaneous and most importantly real time views of the data which will assist merchants with their marketing plans, budgets and business growth in their chosen emerging markets.

Opening New Markets

With a single integration the fully featured PayFuture gateway allows our merchants to accept payments in new emerging market regions. As internet usage grows in these regions so does the opportunity for e-commerce merchants, local as well as international, to enter these new markets and find previously untapped markets for growth. With AI and deep learning the PayFuture gateway offers competitive advantages in areas such as customer journey, increasing approval rates as well as conversion recovery to decrease a merchant’s loss of revenue. Opening new markets means that we offer the most popular local payment methods that are available and ensure that our merchant’s profitability increases.

Why work with us?

Our gateway offers the ability to connect to multiple local payment technology providers across multiple emerging market regions, all via one simple to integrate REST API. You simply need to use our gateway’s function as a switch/connector to access all of the multiple country’s local payment options giving you instant availability to the most popular payment options per region.

5 things you need to know about the E-commerce industry in India

India is known as being the second most populated country in the world. India is experiencing a remarkable digital boom. The Indian E-commerce market is the fastest growing market in the world. It is expected to grow at approximately 1200% by 2026. With increasing internet access and expanding payment options, consumers are shopping more than ever online.

Listed below are some of the factors which highlight the attractiveness of the Indian E-commerce market.

  • The biggest and most influential factor in the growth of E-commerce business in India is the increased use of the Internet and smartphones. It is predicted that in 2021, 70% of the total Internet usage will be done via a mobile device, like an iphone. Mobile usage could be the key to making this market boom, especially as smartphone penetration is growing at 150% year on year.
  • Language is also a key driver for E-commerce growth. The main national languages of India are Hindi and English. The English speaking ratio is higher among those who are younger and it’s the younger generation who are mostly using smartphones and making purchases online. This is a huge market.
  • Cash on Delivery (COD) as a payment method will still be popular in India however the predictions imply that the popularity of COD will reduce from 2021. Cash includes a variety of payment types including paper money and credit or debit cards for example. However, the payment type accepted for COD is generally specified by the seller, meaning that the buyer must make full payment when the goods get delivered. It is predicted that COD methods of payment will drop from 60% of purchases down to 45%. Mobile Wallets & Credits Cards will also pick up steam and grab market share.
  • Government initiatives like, ‘Start-up India’, and ‘Digital India,’ aim to bring new players to the Ecommerce industry. Government schemes like these also encourage networking and collaboration with other experts, which can lead to innovation, including in the E-commerce sector
  • In B2B E-commerce, 100% FDI is allowed. FDI stands for Foreign Direct Investment. Foreign Direct Investment grew 13% at the peak of the COVID-19 Pandemic. India is part of top 100 club on Ease of Doing Business (EoDB). The ease of doing business index is an index created by economists at the World Bank Group. With India being ranked in the top, this indicates better, usually simpler, regulations for businesses and stronger protections of property rights. The reason that India is now ranking higher is largely attributed to ease in FDI norms across sectors of the economy. According to UCTAD’s world investment report, India is in the top 5 for being the most favored investment destination. As the government in India eases FDI restrictions and makes investing more attractive, this is likely to encourage greater global involvement in business, including in technology and more specifically in e-commerce sectors

If you are looking to invest in India, or you’re looking to provide payment solutions to consumers in India, now is the time. At Payfuture, we understand global mobile payments. As mobile usage surges globally, many emerging market’s most popular payment methods are using mobile only wallets and localised mobile payment systems. These are all enabled as standard via the Payfuture connector gateway.

Contact us today to find out how we can help you.