With a unique amalgamation of machine learning (ML), artificial intelligence (AI), Internet of Things (IoT), Bharat Bill Payment System (BBPS), Aadhaar-enabled Payments Systems (AePS) and Unified Payments Interface (UPI), digital payments, which were once limited to existing players like Visa and banks, have now caught the fancy of startups in India.
And, with good reason. According to a Credit Suisse report, the digital payments sector in India, which currently aggregates less than $200 Bn, is poised to grow five-fold to $1 Tn by 2023. The potential opportunity can also be understood by looking at the phenomenal growth of digital payments decacorn Paytm — a company founded in 2010 by infusing $2 Mn is now valued over $10 Bn in 2018.
However, in India where roads are usually built along with potholes, tapping the untapped digital payments space is not an easy task. There are many hurdles along the way — India’s literacy rate is just 74%, 19 Cr citizens don’t even have bank accounts, and 24 Cr have never carried out a single transaction despite having bank accounts and mobiles, according to the latest World Bank data.
While the recent resounding success of most digital payments startups, including Paytm, can be attributed to Prime Minister Narendra Modi’s demonetisation drive and urban India’s propensity to go digital, there are some companies that are adopting a totally different formula to crack the space — they’re looking to tap into the huge, untapped potential of Bharat, or rural India.
Take, for instance, US-headquartered digital payments company MoneyOnMobile, which is apparently neither driven by demonetisation nor has been hit by the RBI’s full-KYC policy for digital payments companies.
MoneyOnMobile (MOM), which claims to be “India’s largest mobile payment platform that facilitates safe and easy financial transactions to millions of Indians,” is betting big on India, and recently announced to infuse $6.2 Mn fund into its Indian subsidiary, as part of its expansion plans.