Visa to pilot its global app-based mobile payment service in India

41% of all e-commerce transactions in India happen over mobile, the highest globally

Visa Inc, the global payments technology solution firm, will make India the global test hub to pilot an app-based mobile payments service — mVisa. The app enables users to transfer money and make micro payments for services such as buying bus tickets or shopping groceries from a retailer.

Visa has tied up with about 20,000 merchants in Bengaluru and Axis Bank, HDFC Bank, ICICI Bank and SBI to pilot the service from September. “The opportunity for electronic payments to penetrate the Indian market is increasing,” said Charlie Scharf, chief executive officer, Visa, on Wednesday.

India has 160 million smartphone users. The base is expected to register a 23 per cent compounded annual growth rate till 2017, according to Vserv, a platform for mobile marketing and commerce.

Nearly 65 per cent of India’s internet consumption happens through mobile, according to a May 2015 report, most famously known as the Mary Meeker report by venture capitalist at private equity firm Kleiner, Perkins, Caufield & Byers. Also, 41 per cent of all e-commerce transactions in India happen over mobile, the highest globally.

Visa already has a number of digital solutions in place that enable payments, including through near field communication (NFC) mode. For instance, on an iOS system, a Visa token service enables the NFC service, where the phone acts as the digital mode of payment.

In the pilot stage, the company is trying to replace physical points of sales (PoS) with mVisa. Besides, it is also banking heavily on merchants doing an electronic transaction for the first-time. “We see an immense opportunity to bring about this transition in the Indian market,” said T R Ramachandran, group country manager, India and South Asia at Visa. Currently, there are about 1.1 million PoS in the country.

It also has done away with the initial investment for the retailer in installing a transaction/cash payment device. Merchants benefit by offering consumers a convenient and secure way to pay, and are instantly notified through SMS when a payment has been received, officials said.

A July report by big data marketing firm Vizury, India saw 2.5 times increase in sales through apps in 2015 as against 2014. Of this, 79 per cent sales were through apps and 21 per cent from mobile web transactions.