Apps will become the orifice for all payments

With the launch of Apple Pay, there is much excitement about mobile becoming the source of payment processing going forward.

The fact that Apple Pay has not come to India has not left Mobile payments too far behind in India. Several companies like OlaCabs and Taxiforsure have been creating mobile wallets of their own on their applications to make it possible for their users to be able to pay through the application for the services that they consume. Each of them currently offer a wallet, where one can store money and spend as the necessity arises. In my opinion, the wallet approach taken by each of the companies is not right This is primarily because people do not like managing too many wallets simultaneously. Its painful and tedious. Also, people love to have choice of service. Loading up cash on one wallet means I am tied to that service unless one is willing to manage multiple wallets.

What would be more interesting is to have ‘payment platforms’ which are integrated with many applications so that they become a way/protocol for cash transaction. Towards this end, companies like Paytm and Citrus Pay seem to be more interesting. A wallet which I can use for the purposes of paying multiple service providers. The only issue thus far has been the rate at which they have percolated through the system. If they can get multiple service providers like taxi services, e-commerce companies, etc. along with the existing utilities payment platform, it would make for a much more interesting play.

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Paytm has taken a step in the right direction by tying up with Uber. They will be able to act as the wallet for any user who wishes to use Uber. In a similar manner, I would like to pay using such a service for many of the distinct online transactions which I carry out.

In the US companies like SpotHero and RadPad (http://9to5mac.com/2014/11/14/apple-pay-parking-rent-winn-dixie/) are making it possible to pay for parking and even rent using the Apple Pay integration within their apps. In essence Apple Pay is acting like a mobile wallet, which many apps are beginning to use for various types of payments.

Extrapolating, one can see, the day is not far when all of your payments would essentially be undertaken through applications. Any and every payment that one needs to make to anybody will eventually move to the mobile wallets and we would probably stop using physical currency altogether. Not to mention the tens of cards that we currently carry around are probably going to disappear as well.

Apps will become the orifices through which all payments flow. The consolidation of all payments flowing over the internet into wallets is the first step towards making this possible. Mobile wallets need to start integrating with as many services as possible to encourage more users to put their money on the wallets. (The RBI rules in India do not permit a more elegant solution) It remains to be seen which service moves the fastest to integrate with the largest number of services as possible to make itself indispensable.

Paytm is probably on the right route, but it remains to be seen if they follow through beyond the Uber integration. It remains to be seen if they can crack through more services such as e-commerce.

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