Mumbai: The recently launched Unified Payments Interface (UPI) by RBI could make mobile wallets like SBI’s Buddy, ICICI Bank’s Pockets, HDFC Bank’s Chillr and Paytm less attractive as UPI does not require a specific bank account.
“That significantly increases the pool of customers UPI could tap into, compared to banks, which have a limited universe of customers. About 80 per cent of Indians, more than 90 crore, have access to mobile phones. If used to its full potential, UPI can penetrate far more homes than all the mobile wallets put together,” said analysts at Centrum Wealth.
According to RBI, the mobile banking has shown a 212 per cent year on year (YoY) growth in value terms in February 2016 and a 131 per cent growth in volume terms. During the same period, transactions through the mobile wallet witnessed 104 per cent growth on volumes and 157 per cent growth in value terms.
“RBI has decided to take advantage of this trend and completely revolutionise banking in India through its recently lau-nched UPI,” Centrum Wealth said in its report.
According to RBI estimates, the cash floating in the system is about 18 per cent of India’s gross domestic product. That makes India one of the most printed currency-dependent economies in the world. RBI wants to cut down this dependence and the UPI has been brought in to do just that.
“It will reduce the effort, time and cost incurred on transactions, below Rs 1 lakh. It will only require a unique ID, an email-like virtual address of a bank customer,” the report said.
