Digital Payments enablement in India: India’s Goal to get rid of Credit Cards by 2020 through government’s (Bharat Interface for Money) BHIM app

  • Indian government launched a new mobile app in December (BHIM), enables bank to bank transfer (P2M and P2P)
  • P2P and P2M transfers enabled through either QR code scanning, typing in the merchant’s user ID, or typing in the merchant’s phone number
  • BHIM uses the Unified Payments Interface (UPI), an interbank transfer system  that is built on the Immediate Payment Service to enable faster P2P payments, operating under the National Payments Corporation of India (NPCI)
  • India’s Aadhar eKYC program is part of the Aadhar Enabled Payment System (AEPS) initiative run through NPCI to record and store user’s fingerprints, unique ID numbers, and mobile numbers to create unique identifiers for each user of India’s payment platform
  • The AEPS program is coupled with new biometric scanners merchants may attach to their POS to enable payments from users who have a bank account linked their ID’s, fingerprints, and mobile numbers to their payment information and simply entering their password and fingerprint into the POS machine to complete a transactio
  • On Dec. 25, NPCI launched the Aadhar Payment App for merchants; this payment application is for merchants to install on their POS and works with government certified fingerprint scanner attachments to confirm payments made using the BHIM app
  • 1.5MM terminals have been deployed by Indian banks since launch (SBI deployed 300M)
  • According to PM Modi, the BHIM app has been downloaded 10MM+ times since launch (0.1% of 1.25B population)
  • Amitabh Kant, CEO National Institution of Transforming India, expressed a future vision of the complete elimination of POS machines, ATM machines, credit cards, and debit cards with the proliferation of this app

India Credit Cards –
India Fingerprint Scanners –
Biometrics adoption rates –

SBI’s Digital-Only Bank: the State Bank of India (SBI) plans to launch its own version of an end-to-end digital bank in the next 3-6 months

  • SBI has 18M+ branches in India and with the SBI launch, would enable to reach customers without the need of a physical branch presence
  • The RBI has recently granted “Payments Bank” licenses to two non-FS institutions, Paytm and Airtel, increasing competition to establish a strong foothold in the digital banking space
  • Demonetization, which forced the withdrawal and reissuance of 86% (14T rupees) rupees in circulation, is driving digital wallet adoption; an end-to-end digital banking experience would assist in keeping currency digital for the bank’s customers
  • At the end of 2016, SBI also blocked top ups to third party mobile wallets, instead  directing users to SBI’s own existing State Bank Buddy mobile wallet
  • A number of end-to-end digital banks have been developed globally from N26, Atom Bank, Ally, among others, but SBI is  first Financial Institution to launch an end-to-end digital banking service in India
  • Out of India’s 1.25B residents, 35% have internet access giving SBI 460MM people to target, growing at a rate of 1.2% each year

SBI digital only bank –
Internet usage:
Additional SBI coverage

Internet of Things (IoT)
Connected Car: Honda / Visa and Volkswagen push wireless in-car payments

  • Honda / Visa ran tests to enable wireless payment within cars at CES in January
  • The demo showed how a consumer might make wireless payments from their car with a focus on gas and parking, removing the need to pay at the pump or at the parking meter
  • Drivers are notified that they can pay for fuel when they are near a smart parking meter or fuel pump, the purchase amount is displayed in the dashboard and drivers confirm payment with the touch of a button, paying via previously stored payment information
  • For parking, drivers can set the time they’ll need from the dashboard display; those consumers then can add time via their smartphones when away from their vehicles.
    On Dec 28, Volkswagen bought PaybyPhone, a mobile payments service allowing consumers to pay for their parking and parking tickets via a mobile app, for an undisclosed sum
  • Volkswagen Financial Services bought Sunhill Technologies (for an undisclosed amount), the largest cashless payment solution in Germany with over 2MM users in 150 locations, in Sept ‘15, so PayByPhone expands the company’s parking payment possibilities
  • In 2016, PaybyPhone processed $250 million in parking payments from 12.5 million users in 300 cities and is adding 7,000 users per day
  • By using PaybyPhone’s underlying payment systems, Analysts speculate that Volkswagen could integrate their payments technology into cars and merchants’ systems; advancing Volkswagen’s ability to make wireless payments beyond parking into other payment areas

Honda / Visa announcement:
Volkswagen Group PayByPhone –

Voice Servicing: Huawei announced Alexa will be preinstalled on its new Mate 9 flagship phone, launching Jan 12

  • Google began its voice servicing capabilities with the Google Assistant on Android (similar to Apple’s Siri) in Oct ‘16
  • Google Home launched in response to Alexa’s success; Alexa’s strategy has been to develop OEM partnerships to integrate their voice services into third party developers
  • As of mid-November, Consumer Intelligence Research Partners estimated that Amazon has sold 5MM+ Echo devices and Amazon stated its sales as “millions” of Alexa-enabled devices over the holiday season (including the Amazon Echo, Dot, Fire TV Stick, and Fire Tablet). Google Home sales estimates have not been released

Huawei / Amazon:
Huawei announcement:
Amazon Sales Figures:


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