Soon get instant loans through mobile wallets

New Delhi: Your mobile wallet, which meets your needs for instant cash in electronic form for various transactions, will also allow you to help businesses plan to add an instant loan facility to their offerings.

The rapid pace of growth in mobile banking, coupled with the growing appetite for smartphones among more than one billion mobile phone subscribers, is what prompts companies such as Payworld, One MobiKwik and Paytm to add another feature to what currently serves as an electronic debit card. .

Stakeholders maintain that mobile banking is becoming big business, with 39.49 million transactions worth Rs 49,000 crore. People are no longer against using their cell phones for transactions. They expect the mobile wallet business to also grow exponentially at around Rs 1,200 crore now.

“We will be rolling out our micro-credit program soon. Users can take out small loans and we receive interest on the repayment. The pilots have already been completed. We are awaiting procedural approvals. We plan to launch in early May,” One MobiKwik Systems founder Bipin Preet Singh told IANS.

“It’s instant. An eligible user will get the loan instantly credited to the wallet. At the pilot stage, we made small loans of Rs 100 to 500. Once the program rolled out to everyone, users could take out loans. exceeding Rs 5,000, ”Singh said.

What does this imply? Mobile wallet companies are partnering with commercial banks and non-bank financial corporations (NBFCs) to deploy the service, which will analyze user history before crediting the loan. Mobile wallet companies alone cannot grant loans.

“We have had discussions with NBFCs to provide micro and nano loans to mobile wallet customers. We will use user transaction analysis and provide the same to NBFC. They will then approve the loan,” Praveen Dhabhai, Director of Operations at Payworld. said IANS.

Paytm, however, is considering a slightly different model. “Customers who open a bank account in our payment bank – we’re launching it this year – will be able to access their mobile wallets, no other way,” said Nitin Misra, head of the company’s payment products and operations.

In the process, the mandatory “know your customer” check is also performed, he explained.

The interest rate, stakeholders said, as well as the loan term will be competitive. “The duration will depend on the user’s profile and history – between 15 and 30 days. The repayment date will be indicated so that the minimum wallet balance required for direct debit is maintained,” Singh said.

All customers will have to do is click on a specified button in the mobile phone app and then choose the option they have on the touchscreen. Once done, the money will be debited from the account in less than 10 minutes.

A loan literally at your fingertips!

Stakeholders are also dismissing concerns about mobile wallet fraud. “Strict controls are in place to prevent fraud. Under no circumstances can I open another person’s mobile wallet from my device, even if I have the username and password,” said Misra de Paytm.

“Fraud today represents less than 0.07% of the total population of MobiKwik users. Once a fraudulent account is detected, the user is blocked and no longer allowed to enter the system, ”Singh added.

When it comes to the size of the mobile wallet company market, Paytm says it currently has over 125 million customers, while Mobikwik claims it doubled its user base in 2015-16 to 30 million. The third major player Payworld claims it currently has 10 million users. Many more are in preparation.

According to consultancy firm TechSci Research, by 2020 the mobile wallet market will hit $ 6.6 billion in India. The Reserve Bank of India has also licensed 145 banks to provide mobile banking services and each has the potential to become a mobile wallet provider – with instant lending service.