Net1 and Mobikwik Positioned to Support Indian Government’s Push Towards A Digital Society
1 December, 2016 – Following the Indian government’s decision to demonetize 86% of the country’s currency in circulation on November 8, 2016, Net1 continues to accelerate its efforts and is poised to facilitate India’s digital payments revolution via the deployment of its various biometric, offline and mobile solutions, including its patented VCC and UEPS technology.
Demonetization is not new to India, as its currency was also previously taken out of circulation in 1946 and 1978. Much of India’s population remains consistently unbanked or under-banked, but this time around the proliferation of mobile phones and mobile internet gives Indian citizens a safety net of electronic payments, breaking the vicious cycle of a cash-based economy with its associated shortfalls.
According to a report done by the United States Agency of International Development (USAID) and the Indian Ministry of Finance, 97% of all transactions in India are conducted using cash due to limited accessibility and usefulness of traditional banking institutions and payment methods. Over a relatively short period of time digital payments have grown exponentially. with Prepaid digital wallet providers including MobiKwik and Oxigen have shown particularly rapid growth in customers, merchants and transactions since demonetization came into effect three weeks ago. Digital wallet providers offer a range of payment methods such as P2P payments, bill payments, recharges and selectively, merchant payments, in a fast, comparatively secure, and convenient manner.
Net1 already powers the Prepaid VISA virtual card engine for Oxigen’s digital wallet and their 25 million users. Similarly, MobiKwik will soon launch their MobiKwik Card to their 40 million users, which will facilitate universal acceptance of their wallet, further differentiating themselves in an otherwise competitive market. MobiKwik customers will therefore have more control and a wider choice of merchants to spend at, with greater security than traditional debit or credit cards. Virtual cards are secure, as the merchant would not have access to card details, and can be utilized online or offline. Additionally these cards can be static for self-use, or dynamic for gifting.
“We have increased our on-ground workforce twelve times and MobiKwik payments will soon be accepted by an additional one million retailers directly. Despite our efforts, we still cannot reach every retailer in this country in the next two months, thus, we are launching MobiKwik Card in partnership with our strategic investor and partner Net1. The card will help users pay through their e-wallet without having to worry about the merchant’s inclusion in our network. They can generate a new card every time to make payments and use MobiKwik wallet pan India, for any purchases,” said Upasana Taku, co-founder of MobiKwik.
Net1’s VCC technology and products are already deployed in various territories around the globe, and have been nominated for and won several awards including Africa’s Best Fintech App in 2015. Net1 was also listed as one of the Top 100 African Fintech Businesses, as well as one of Fortune’s 100 Fastest Growing Companies in 2015.
“With the massive groundswell in digital payments because of demonetization, the one thing all payment providers need urgently is the ability to provide interoperable technology that works across as many of, if not all merchants, instantly. VCC is retailer-independent, handset independent and telco independent, which means that it can be used anytime and anywhere by customers. It can be used for both online, and offline transactions where there is no mobile phone network. No bank account or credit card is needed, and the app also allows for account top-up from several sources, including cash and EFT,” said Philip Belamant, Chief Product Officer, Net1. “Subscriptions to our VCC solution have grown some 400% in India since demonetization began,” he added.
“The friction caused by demonetization has impacted real people with real problems on the ground, from paying for food and groceries to school fees and travel,” said Dhruv Chopra, Managing Director, Net1 India. “Our VCC technology helps alleviate a number of these pain points in the short term, and going forward, the Indian government’s initiatives to drive digitization and financial inclusion will make Net1’s other core products such as UEPS and Variable PIN even more relevant,” he concluded.
The technology will be revolutionary for Indians uncomfortable with using traditional debit cards, as it gives the customer complete control of their finances and spend, while protecting their life savings. There is a strong underlying momentum towards digital and mobile payments in India and though demonetization has led to an unprecedented surge in adoption over the past few weeks, the normalization of cash availability will be a strong indicator of whether there is a new normal in India with a permanent shift to a “less-cash” society.