When it comes to offering digital services in India, there is absolutely no correlation between the services offered by various firms and the laws that are in place to regulate the sector, says leading entrepreneurs in the mobile payments space.
"The Pharmacy Act of 1942 regulates the drug distribution space, which means there is more than just plenty of catch up these laws have to do for a digital company to thrive," says Healthkart.com, Co-founder,Prashant Tandon, an online vendor of health products, at the sixth edition of India Internet Day organized by Tie Delhi-NCR.
It's more or less the same story for mobile wallet firms. While the RBI may have eased the payment mechanism by a bit after playing firm on retail networks, operators like ItzCash feel it is still not enough to move their cart.
"There is this fear of accountability. It looks nice as long as a transaction goes smoothly, without any glitches but what happens when you lose money? An Rs. 100 lost means everyone's neck is stake. Who will stick his neck out? Will it be a vendor, will it be the RBI or will it be the customer?" asks ItzCash, MD, Naveen Surya.
That in essence underscores how wallets operate or see their operations in India, where people are "still apprehensive about how we use our cash online. For bigger transactions it is always the card. Wallets work only when the need and the risk factor are minimal," says Satyen Kothari of Citrus Pay.
Wallet firms are pushing for more porous system that can fix the regulatory apprehensions among customers. "To be very honest, all these fears are hyped. This whole wallet turnaround we are talking about sits on a tight, regulatory wrinkle," says Kothari.
Players in the space agree that consumer behavior at some level will always be esoteric but individual choices are governed by what makes a person comfortable. However, certain regulations make India a unique marketplace. The norm by RBI to have a two-step verification process for each transaction has meant greater demand for services like a mobile wallet by creating artificial demand that is not based on utility. For example the day such regulations are rolled back, companies like Uber would not need to offer a mobile wallet service.
"Norms are coming at a time when cheaper Android smartphones are becoming more common in India, and mobile Internet traffic now outweighs desktop computer traffic," says Mobiwik, Founder and CEO, Bipin Preet Singh.
Singh, however, is hopeful that the growing mobile penetration will make lawmakers go back to the drawing board on letting more play for wallet services in the digital ecosystem. "In few years from now, maybe we would see just a single-touch authentication system."
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