Naveen Surya, MD, ItzCash Card Limited : \u201cTechnology removes friction and reduces counterparty risk to enable the non-cash portion of the economy to grow.\u201d<\/em><\/strong><\/h3>\n<\/div>\n<\/div>\n

\u201cIn India cash is still king. 90% of all monetary transactions in India are cash.\u201d \u201cPayment solutions enable those who don\u2019t have a debit \/ credit card \u2013 which is 80% of the population in India.\u00a0 This includes 16 to 20 year olds in urban centers, who may not have independent credit cards or bank accounts. The first generation payment solution was the digital wallet \u2013 as a customer, you went to a bank filled out a form and were able to access you money digitally.\u00a0 This was not unlike a debit card, but you didn\u2019t need a bank account; and you got access to your money through an ATM. \u201c<\/p>\n

Payment solutions for the mobile market:<\/h2>\n

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Deepa \u2013 e-bay evangelist \u2013 \u201cIndia is a market of mobile \u201cfirsts\u201d \u2013 we\u2019ve adopted smart phones faster than other markets. 68 mio Indians visit online shopping sites but only 9 mio\u00a0 are buying so there is a lot of potential. Mobile is mostly being used for \u00a0\u2018showrooming\u2019 right now.\u201d<\/em><\/strong><\/h3>\n<\/div>\n

\u201cSome options in the market are for example what is used by ebay \u2013 the platform is called \u201cpaisapay\u201d. It functions like an escrow i.e. merchant gets payment only after the consumer gets the product.\u00a0 To give you a sense of how fast the market has adopted\u00a0 \u2013 in 2004, 15% of our transactions on ebay were online via paisapay \u2013 today, in 2013 its 95%.\u201d<\/b><\/p>\n

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Ashish Hemrajani, Founder & CEO, Bigtree Entertainment Pvt. Ltd.;\u00a0\u00a0 \u201cBookmyshow is 14 years old. We\u2019ve gone through the dot-com bust, scaled down and then scaled up.\u00a0 As a merchant, we go where the consumer is \u2013 it\u2019s as simple as that\u201d<\/em><\/strong><\/h3>\n<\/div>\n

\u201cTill 2002 \u2013 99% of transactions from the call center. No debit \/ credit card penetration. We were a call center and delivery company. \u00a0Even in those days, with payment systems being rudimentary at best, we could still profile and tell a lot about consumer behavior. For example \u2013 there was a customer in Delhi \u2013 who would have tickets for family style entertainer movies delivered to an address which was different from the one given when wanted to view \u201cadult\u201d entertainment \u2013 a clear \u201ctell\u201d that he was \u2013 shall we say \u201ca colorful personality\u201d. Today 17% of all our transactions are via the mobile, and more than 70% are on the web. We are integrated with 32 payment gateways \u2013 we are agnostic to the solution provider. When transactions with one gateway taper off or fall,\u00a0 we auto-switch and load balance.<\/p>\n

Biggest issue faced for the large scale adoption of payment solutions<\/h2>\n

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\u00a0Naveen Surya, MD, ItzCash Card Limited : \u201cFailure rates on payments through gateways @ 25 to 30%. For Credit cards its about 9% and with net-banking its about 15%.\u201d<\/em><\/strong><\/h3>\n<\/div>\n

As a merchant, what is the biggest requirement from payment solutions<\/h2>\n

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Ashish Hemrajani, Founder & CEO, Bigtree Entertainment Pvt. Ltd.;\u00a0\u00a0 We want one-click payments. The time-gap between the consumer thinking about something to the time its delivered to him should be minimalistic.<\/em><\/strong><\/h3>\n<\/div>\n

The main reason for payment failures is usually \u2013 server to server. In other words, unstable data connections \u2013 between the user and the payment gateway lead to dropped transactions.<\/p>\n

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Pramod Jajoo, CTO, BigBasket.com: \u201cPayment security is still the biggest issue in the mind of the customer \u2013 about 65% of our transactions continue to be Cash on Delivery.\u201d<\/em><\/strong><\/h3>\n<\/div>\n

Role of regulations<\/h2>\n

The panel felt that the Reserve Bank of India has played a catalyst\u2019s role in upgrading the payment infrastructure in the country (from ECS to NEFT to RTGS platforms) \u2013 given the many complexities of geography, Telecom density, telephony etc.\u00a0 Fraud rates have come down significantly (especially in international credit card transactions) in the last 10 years \u2013 and the customer does not have a problem with trusting online-payment mechanisms. This is in contrast to several other emerging markets (e.g. Russia, Brazil) where adoption has been hampered by customer concerns around security.<\/p>\n

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\u201cWe are one of the last markets to adopt chip and pin \u2013 this is an area where a regulatory push could help.\u00a0 POS devices will morph only where there is customer adoption. The fastest way to consumer adoption is through regulation\u201d.<\/strong><\/em><\/h3>\n<\/div>\n

How should a merchant approach this space?<\/h2>\n

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\u201cMerchants should focus on what they do best \u2013 supply.\u00a0 \u201cThat\u2019s where marketplaces can play a role; as they can be leveraged for traffic and logistics. \u201c \u2013 Deepa (E-bay ecommerce evanlegist)<\/em><\/strong><\/h3>\n<\/div>\n

\u201cMerchants should be spending their time strategizing on how to better the shopping experience, their merchandise mix, how to increase sales, how to create loyalty, what social media strategy to use \u2013 they should not have to worry about payment solutions\u201d.<\/p>\n

Alternative payment platforms \u2013 are they good?<\/h2>\n

The panel felt that, from a long term, structural perspective, alternative payment platforms were not healthy.\u00a0 In other markets, some of these platforms have been associated with less than positive press \u2013 e.g. money laundering \/ terrorism connections.<\/p>\n

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\u201cIt\u2019s not alternative payment platforms that are needed \u2013 it\u2019s inclusive platforms which can cover as many payments modes as possible and as much of the population as possible\u201d.<\/em><\/strong><\/h3>\n<\/div>\n

Audience question:\u00a0 Interchange rates \u2013 are they optimal?<\/h2>\n

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Ashish Hemrajani, Founder & CEO, Bigtree Entertainment Pvt. Ltd.;\u00a0\u00a0 \u201cOf course, as a merchant I would like interchange rates to soften. From a consumer adoption perspective, the lower the interchange rates the more the choice to the customer in terms of the entry of additional payment solutions providers. In the credit card space \u2013 there are only 2 major players (Master \/ Visa) \u2013 and the issue is not about whether the rates are high or low \u2013 the issue is that the rates are different for online versus offline transactions. This difference (1% for offline versus 4% for online transactions) is substantial.\u00a0 In the debit card space, the RBI stepped in and set the rates \u2013 it is not optimal for a Regulator to step in and set rates \u2013 especially if you want to encourage large scale adoption and move away from a cash based transactional economy\u201d.<\/em><\/strong><\/h3>\n<\/div>\n

\u00a0<\/em><\/p>\n

Dewang Neralla, Director & CEO, atom technologies<\/b>:\u00a0 \u201cStructurally speaking, over time, the market should move to an acquirer centric model. In the past rates were based on an \u201cissuer centric\u201d model \u2013 but again, from the perspective of creating scale \u2013 it\u2019s a move that should take place.\u201d<\/p>\n

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