Sunday, January 17, 2016

Ideally, dedicated mobile wallets and online payment services shouldn't exist - or are these services acting like branchless, lean, direct banks that operate only online?

These thoughts occured to me when I looked at these three things:

Why do dedicated mobile wallet/online payment services such as MobiKwik, Paytm, FreeCharge, etc., exist at all? Are these services really separate services in themselves, or are these services merely [temporarily] filling in for the features missing in the banking services provided by banks in India? Sometimes it seems to me that ideally, it is the mainstream banks - ICICI, HDFC, Axis, Deutsche, RBS, SBI, etc. - that should be providing all of the services of MobiKwik, etc.

After all, tasks such as bill payments, DTH/mobile recharge, etc., are things that should be doable directly from within the online banking platforms of the banks [and also from the applications]. There is no reason and no extra benefit of having a separate, third-party service where you have to transfer funds first [from your mainstream bank account], only to spend it later. In any case, this extra step of having to add money to your mobile wallet seems like an unnecessary and redundant step that can and should be eliminated. If regular banks add all of the features of these third-party services, coupled with the quick and hassle-free experience of these services, will these services quickly go bust? Seems likely.

On the other hand, it seems like these services are increasingly looking like online-only banks, providing more and more features of regular banks, minus the high costs of having physical branches.

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