The convergence of several factors indicate that cash payments will soon no longer dominate in India. Card transactions have been growing steadily over the past five years, and the debit card base has recently increased by more than 40 per cent. At the same time, India has emerged as one of the biggest smartphone markets in the world, with more than 900 million mobile subscribers. Wirecard has positioned itself as an innovator and technical enabler in India.
Consumers’ increasing familiarity with both electronic payments and mobile technology has created an opportunity to introduce mobile point-of-sale technology in India. In the previous financial year, Wirecard acquired the payment business of the Great Indian (GI) Retail Group. The acquisition also includes shares of companies providing payment services in India, the Philippines, Indonesia and Malaysia under the brands “iCASHCARD”, “Smartshop”, “StarGlobal”, and “Commerce Payment”, as well as other brands within the segment.
In addition, Wirecard has become a 60 per cent shareholder in GI Technology Private Limited (GIT), a licenced Prepaid Payment Instrument (PPI) issuer in India. The acquisition ensures Wirecard a stake in one of the fastest growing licenced PPI issuers in India, as well as a Full Fledged Money Changers (FFMC) licence to carry out multi-currency transactions.
Issued by GI Technology, the semi-closed-loop e-wallet “iCASHCARD” is India’s leading payment solution for domestic remittance using Immediate Payment Service (IMPS). iCASHCARD is one of the most popular semi-closed-loop payment instruments offered by Indian Railways’ website, IRCTC, which is one of the biggest e-commerce websites in the Asia Pacific region. In addition to its core market in India, GI Retail has successfully expanded into several Southeast Asian markets.
Growing middle class presents new retail opportunities
By 2022, India is expected to surpass China as the world’s most populous country. Not only that, but in five years’ time, the average age of India’s population will be around 29 years old, among the lowest in the world. This group is already having an impact at checkout. Young consumers, who are more likely to embrace payment features like contactless and mobile transactions, already make up 34 per cent of urban consumers. They are becoming wealthier, too.
As India’s overall GDP continues its high single-digit growth each quarter, the country’s per capita GDP is also on the rise. McKinsey predicts that incomes will nearly triple over the next two decades, giving rise to a new middle class of over 500 million people. By 2025, India will be the world’s fifth-largest consumer market. This massive demographic shift will impact every aspect of life in India, including not only how people pay for goods, but also how many people make purchases. Innovative payment solutions that are quick and easy to implement will be crucial in this new era in order to redress the lack of existing retail structure and meet the needs of India’s young, affluent and mobile consumers.
Leapfrogging old systems with Bijlipay
Bijlipay is a white-label solution for the mobile point-of-sale (mPOS) from Wirecard and Chennai-based partner, Skilworth Technologies Private Limited. Bijlipay, a system for card payment, involves a mobile app, which merchants use as a till system on their smartphones, and a chip card reader, which is connected to the app via Bluetooth.
Because traditional POS systems are not common in India, many merchants are open to the security and transparency benefits that Bijlipay offers. Moreover, people in the emerging markets are used to simply leapfrogging standard technologies for newer innovations. To name just one example: wireless internet usage bypassed fixed line usage in India in 2012. As one of the first certified mPOS solutions on the market, Bijlipay – and Wirecard – are benefiting from this well-timed rollout.