By Girish Jaggi, Corp Comm Manager, Germin8
With a population of over a billion and most of them belonging to the rural populace, it is no surprise that the majority of Indians till date prefer to use a feature phone over a smartphone. While the internet and smartphone penetration has been steadily increasing year on year, India still has a long way to go to completely adopt smartphone usage with active internet connectivity. Looking at the statistics, the National Payments Corporation of India (NPCI) which has been instrumental in developing UPI, Aadhar payments, etc. is now testing a voice-based payment pilot for feature phones, especially those with poor connectivity in their region.
Very similar to how UPI pins are generated in a smartphone, this new service will allow phone users to generate authentication pins through common dial-in. As a security measure, two-factor authentication is tested in the pilot. In its beta-testing phase, there are a lot of developments still underway, like – handling merchant payment at banks end, ability to manage concurrent calls, setting up proxy identity numbers to authenticate the acceptance, etc. Live experiments are underway with very few financial institutions testing the service in a controlled environment, albeit with their own set of restrictions.
In 2016, under the leadership of then RBI governor, Dr. Raghuram Rajan, UPI payment was introduced in the country. The initial few months for the mobile payment service adoption were slow. It took UPI 17 months to reach 5K cr transaction value, however, this figure doubled within the next three months and tripled in just one more month. As of June 2021, UPI payments have crossed a mark of 5,47,373.17 cr and are continuing to show growth to date. NPCI is hoping to replicate the success with voice-based payment services as well.
While it’s extremely gratifying to have a convenient payment method, especially if you’re using a feature phone, commanding a bot to make payments will not be easy for Indians to trust. Historically rural India has believed in physically making payments to their vendors, dealers, etc. hence even they took a while to open bank accounts. Users will find it difficult to trust voice-based payments fearing that personal conversation might get recorded too. Keeping all this aside, the biggest concern will be trust in this new feature/offering by the NPCI as people will tag it “too-risky” and having “lack of familiarity”, the adoption process will be slow. Apart from this, there are challenges at the end of financial institutions as well. Cost of integration, hindrance in merchant adoption, large scale rollout, bank policies, etc. all will factor in ensuring smooth functioning and adoption of the service.
India has generally been a technology-friendly country and technology has slowly but eventually found its way to the hinterlands. A lot of leg work is yet to be done if this has to be mass adopted by India, especially by the rural markets. Emphasis has to be given on security, intuitive nature, back-end support by financial institutions, cost, and efficiency of the product. While the initial results are so far promising, the success of a larger rollout, post-approval from RBI remains to be seen.
