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Digital Commerce: Moving towards virtual currency and paperless transactions

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Digital Commerce: Moving towards virtual currency and paperless transactions

Electronic and mobile payment channels play an important role in enhancing eCommerce. Panellists at the National Conference on Digital Congerence, held in the Capital on November 27, 2009, discussed issues surrounding the development of electronic and mobile payment options and churned out some interesting solutions like simplifying virtual currency, threw light on opportunities like enabling micro credit with virtual currencies and identified barriers to virtual transactions like that of India not being an application friendly country.

The discussion was moderated by Sanjay Aggarwal, General Manager (Operations), IRCTC and had panelists like Probir Roy, Co-founder, Paymate; Himanshu Singh, Managing Director, Travelocity India; and Rajpal Duggal, Group Advisor, Oxigen Infovision.

Aggarwal of IRCTC started the session by giving a brief backgrounder about the prepaid cash cards industry, an important and valuable part of the eCommerce space. According to him, IRCTC received 22 per cent of its payments through such cash cards. So much so, these numbers are even higher than those generated by other methods of payment like netbanking. “These cards are still in their evolutionary stage, but have gained much popularity and acceptance due to their penetration,” he noted.

Some of the advantages that these cards have include lesser amount of risk, ease of procurement and use as far as the consumer is concerned, and no hassles of chargebacks unlike credit cards, as far as the merchant is concerned.

Probir Roy of Paymate then threw some light on the mobile payment industry. He revealed some startling figures as far as the volumes of Indian financial transactions were concerned, wherein he said that 88 per cent of transactions were cash transactions, 11 per cent were through cheques, while a meager 1 per cent was through alternative payment modes like mobile or e-payments.

“We have to reduce our dependency on paper currency and coins and leap frog towards virtual currency,” he stressed. To achieve this, mobile phones and furthermore mobile payment methods would play a crucial role as the penetration of this device is phenomenal in the Sub-continent.

Discussing the efficiency of such modes of payments, Singh of Travelocity felt that the efficiency and viability factors needed to be looked into seriously. “With gateways like Visa and Mastercard, as per RBI guidelines, making mandatory multiple verification of online transactions will result in a great boost and make such modes of payment highly efficient and secure,” he said pointed out.

However, Duggal of Oxigen Infovision raised an important question by asking whether the consumer really felt a pressing need to go online and transact? “In the West, online activities sprang up as these offer a lot of convenience, while in India, it is more about the touch and feel factor and the consumer’s penchant to bargain,” he said.

According to him, the Indian telcos would have to pay an even bigger role to push this sector forward. With 3G becoming more widely available in the country and with mobiles and computers converging, a lot could happen in terms of e-Commerce, he felt.

Some other categories that can benefit from virtual currency are micro-credit, where currently transactions are carried out in cash, and the banking sector. A mammoth chunk of India’s population still remains unbanked due to infrastructure problems. This could be taken care of by methods like mobile payments as mobile phones had a good penetration amongst India’s rural and remotest sectors, he concluded.


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