UPI Threat: Mobile Wallet Providers Forced to Expand Their Business Strategies

BENGALURU: PayU’s CEO, Laurent le Moal has raised a big debate in the corporate world of India with his comment that the era of mobile wallet is over. Companies like Paytm, MobiKwik are rebuffed with the recent remark of PayU’s CEO, but they are admitting that major diversification is required in this regard to combat with Unified Payment Interface (UPI). The entry of UPI in Indian online payment market has changed the market shape with its one-window option. It allows peer-to-peer transactions on mobile phones through virtual ID provided by banks. With UPI users will not have to deposit their amount into third party wallet and they will have direct access through their registered mobile or virtual ID.

The mobile wallet market is expected to gain a growth of 30 percent from 2015 to 2019 but UPI has forced mobile wallet providers to raise their eyebrows and diversify the business strategy. It is going to be hard for new startups and SMEs as they have to go through major transformation to stay in the competition – reports Business Insider.

National Payments Corporation of India (NPCI), the prime authority for all retail payments made in India is working closely with banks and has collaborated with 29 banks to provide UPI services. NPCI is the main hand behind UPI and is trying to bring the convenience for those people who only have the bank accounts to reduce the use of direct cash, says AP Hota, Managing Director, NPCI told Economics Times.

Vijay Shekhar Sharma, Founder of One97 Communications, the parent company of Paytm told Economic Times that his company is moving towards becoming a payments bank, from an online wallet provider.