The ongoing push by the Reserve Bank to revolutionise banking through the Unified Payments Interface (UPI) will leave mobile wallets redundant, as mobile banking has jumped over threefold in February from the year-ago period, according to a report.
The report, by city-based Centrum Broking, stated that mobile wallet services like SBI’s Buddy, ICICI Bank’s Pockets, HDFC Bank’s Chillr and standalone operator Paytm will be redundant with the massive adoption of the UPI.
“Mobile banking has taken the country by storm, growing by 212 per cent growth in value terms in February 2016 over the same period in 2015 and by 131 per cent in volume.
“If the UPI adoption continues mobile wallets like SBI’s Buddy, ICICI Bank’s Pockets, HDFC Bank’s Chillr and Paytm will be redundant,” a Centrum Broking said in a report titled- ‘Banking Transactions – Technological Disruption’.
The report attributed the RBI push to adopt UPI as an effort to lower the cash economy. Quoting RBI data, the report said the cash floating in the system is about 18 per cent of the GDP, making the country one of the most cash-dependent economies in the world.
“The RBI wants to cut down on cash dependence and the UPI has been brought in to do just that. It will reduce the effort, time and cost incurred on simple transactions, below Rs 1 lakh. Through UPI, two or three bank accounts can be linked and therefore any payment/withdrawal can then be done by just sending a message on this app,” the report said.
UPI does not require a specific bank account unlike existing players which offer the product to only those who have an account with them, thus significantly increasing the pool of customers UPI could tap into, compared to banks which have a limited universe of customers.