A host of international companies are in talks with domestic mobile wallet service providers like MobiKwik and Paytm to attune their payment models with domestic regulations. Companies like AirBnB, Skype, Linkedin and Uber, who use international payment gateways, are looking to integrate domestic mobile wallets into their payment models to comply with the Reserve Bank regulations.
The central bank had recently clarified that all online transactions made in India using credit cards have to undergo a two-factor authentication process. Global taxi service provider Uber found itself in the eye of a storm soon after its launch in India, with Association of Radio Taxis in India raising a red flag over its payment process. Uber stores a user’s credit card details and debits the charges to be levied after the ride, which enhances user experience as against domestic taxi service providers who abide by the two-factor authentication process.
Mobikwik, for instance, has tied up with web hosting companies like GoDaddy and HostGator while talks are on with ESPN, AirBnB, Skype and Linkedin. A tie-up with domestic payment companies not only helps these players with international payment gateways abide by regulations, but also gives them access to the 300 million debit card users in the country. Incidentally, international payment gateways do not accept debit cards and the number of credit card users in India stands at a mere 19 million.
?With the two-factor authentication coming into play, the international companies are forced to work with Indian payment companies and they are constrained to take a decision fast. Besides, they also want to expand their user base and the number of debit card users far outnumbers the credit card users. In case of international payment gateways, only credit cards are accepted,? MobiKwik co-founder Upasana Taku told FE.
Paytm confirmed that they are in talks with Uber to integrate their mobile wallet into the taxi service provider’s application. ?We are in talks with Uber and also other taxi service providers like Ola and TaxiforSure. But nothing has been confirmed yet. It’s a bit early to comment,? said Amit Lakhotia, VP-Business, Paytm.
Paytm has also tied up with payment gateway service provider CCAvenue to tap into the latter’s expansive network of about 15,000 merchants. The company is also in talks with a host of merchants to directly integrate their wallet services with the merchant’s payment module. Paytm already works with online businesses like Bookmyshow and Homeshop18. ?CCAvenue has been in the business for many years and has close to 15,000 merchants. Paytm will be an additional payment mode for these merchants. The tie-up will help Paytm tap into that merchant base,? Amit Lakhotia, VP-Business, Paytm, told FE.
At present, Paytm has about 13.5 million users and hosts transactions to the tune of Rs 200 crore every month. The central bank had recently said there were instances of transactions being effected without the mandated additional authentication.
?It is also observed that these entities are evading the mandate of additional authentication/validation by following business/payment models which are resulting in foreign exchange outflow. Such camouflaging and flouting of extant instructions on card security is not acceptable as this is in violation of the directives issued under the Payment and Settlement Systems Act 2007 besides the requirements under the Foreign Exchange Management Act 1999,? the RBI said.
