According to a Knowledgefaber study, the Indian m-payment industry will be worth $1.15 billion by 2016.Driven by an unprecedented growth in the internet subscriber base, which is expected to increase to 150 million by end-2012, the m-payment industry in India is estimated to increase from $86 million in 2011 to $1.15 billion in 2016.
Between 2011 and 2016, this space is expected to grow at a compound annual growth rate of 68 per cent.
As per the study, the key drivers for the m-payment industry are the availability of affordable handsets, low mobile tariffs and increasing voice and data network coverage across the country. The lack of adequate banking infrastructure and low internet and PC penetration will provide further impetus to the market. However, factors such as security concerns while making payments and the lack of awareness, specifically in the rural areas of the country, will be the roadblocks in the growth of this space.
According to the report, currently, the market for prepaid cards in India is estimated to be at $7.98 billion, and is growing at 40 per cent each year.
While payroll cards dominate the prepaid cards market with a 34 per cent share, travel cards and multipurpose cards have a market share of 19 per cent and 27 per cent, respectively. The market is highly consolidated among three companies ? Axis Bank, ICICI Bank and Itz Cash Card. Together the three companies, account for 73 per cent of the market value in 2011.
As per the study, there is huge potential for the expansion of the prepaid cards market in the country, provided all government and other cash transactions are routed through prepaid cards. The current regulatory landscape favours banks but it focuses more on credit and debit cards instead of prepaid cards.
According to Knowledgefaber, currently, near field communication (NFC) technology in the country is still in a nascent stage in India. However, the trial of NFC-based transactions has started to pick up in rail ticketing and at retail outlets. Currently, many banks, mobile network operators, vendors and independent companies are already implementing NFC technology and are undertaking trial runs across the country. Mobile payments are increasingly being adopted by Indian consumers.
Madware catching-up – Mobile adware, or ?madware,? disrupts the user experience and can potentially expose location details, contact information, and device identifiers to cybercriminals. Madware, which sneaks onto a user device when they download an application often sends pop-up alerts to the notification bar address icons, changes browser settings, and gathers personal information. Over the last nine months the number of applications including the most aggressive forms of madware has increased by 210 per cent. Since, location and device information can be legitimately collected by advertising networks, it helps cybercriminals target users with appropriate advertising. There will be increase in madware as increasing number of companies seek to drive revenue growth through mobile advertising.
Monetisation of social networks bringing in new risks – As consumers, people place a high level of trust in social media ? from sharing personal details, to spending money on game credits, to gifting items to friends. While e-payments have so far been adopted slowly by consumers but with the addition of payment methods in social media, e-payments will increase significantly. With this there would also be increase in the incidents of cybercrime, wherein malware will spread socially. It takes over the user’s account, re-sets passwords and uses the encrypted but stored credit card information to make real world purchases for the cybercriminals. Cybercriminals will sell and trade financial information with one another to gain greater access to people?s accounts.
As users shift to mobile and cloud, so will cybercriminals ? Cybercriminals will follow users to new mobile devices such as smartphones and cloud. There have been significant increase in presence of Android-based malware in 2012. As users add new applications to their mobile phones they will pick up malware. Some mobile malware duplicates old threats, like stealing information from devices. Today mobile malware sends premium text messages to accounts that cybercriminals can profit from.
