As currency disappears, people are turning to online options, doubling downloads of payment apps. And kirana stores and investors alike now want to tie up with digital wallet startups
When the management at payment service provider PayU discussed sales targets last month, the mood was somber. The sales executives needed to be more aggressive, felt PayU managing director Jitendra Gupta, who had just joined the firm following PayU’s acquisition of his venture Citrus Pay.
Photo credit: Vodafone Medien
The latest sales meeting, which took place last week, was very different though. “We were all smiling. I told the team, look, your sales targets have been completed by the Prime Minister himself,” Gupta says.
The mood’s the same at Gurgaon-based mobile wallet company MobiKwik. Founder and director Upasana Taku hasn’t slept a wink in the last two days. “A lot is happening at the office. It’s exciting, but many things need to be taken care of now. My one-year-old thinks I have forgotten him completely,” she says.
The government’s move to withdraw Rs 500 and Rs 1,000 notes has come as a bonanza for the digital payment solutions startups, which after a period of dramatic growth had begun to see growth rates slow down.
With no cash to pay, millions of people who felt cash was safer than digital transactions, or who simply had not thought that digital worth their while, are now downloading payment apps and refilling their digital wallets.
Paytm, the largest Indian mobile payment wallet with more than 100 million users and 2 million transactions a day, saw app downloads going up by three times and payments for offline transactions by five time in the first two days following the government’s move. It added one million new saved credit/debit cards in two days — cards that are used to refill the wallet.
MobiKwik, which has around 35 million customers, said there was 100% growth in customer numbers day-on-day in the past few days. Mobile payment app Chillr, which has 2 million downloads and is promoted by HDFC, has seen a growth of 30% in app usage and a 50% increase in downloads. PayU’s digital wallet business, which has over 30 million consumers, saw the amount of wallet loads rise two times in the first two days.
Almost every digital payment solutions venture is now focusing on getting people to use their solutions for offline transactions – and not merely for purchases made online. And that’s really the big opportunity, given that online transactions are still a tiny proportion of the overall transactions in India.
So, if you walk into a McDonald’s or Cafe Coffee Day or Shopper’s Stop today, you can use a digital wallet on your phone to pay for your purchase.