First, plastic money replaced physical money. And now, digital money has taken over the role of the plastic credit and debit cards. We are talking about mobile wallets and payment solutions that have replaced the way we were handling electronic financial transactions. Though companies like PayTM and MobiKwik have been around for a few years now, they have recently become popular. Applications such as Momo and Ultracash have partnered with mobile wallets to help users to pay easily using their mobile phones at various partner places such as restaurants, malls and cinema multiplexes. These applications provide the option of registering credit cards, debit cards for payment to various merchants. These applications also provide net banking as an option for payment.

Recently, many merchants – even local grocery shops – allow users to pay through these applications. All parties in the ecosystem that includes merchants, mobile wallets, and application vendors are providing attractive offers in the form of discounts and cashback to promote usage of these applications.

How it works: First, users need to register their cards with the application. Then they need to enter bill amount in the application and pay. The amount gets paid using the money that is there in the wallet (based on previous top ups) or is paid by just selecting the registered card and entering CVV. Most of these applications also provide an option to pay by net banking in which case the user will be directed to their bank’s payment gateway. These applications keep track of the time taken for the payment and publish it immediately after a transaction.

Authors: Krishna Kishore, Senior Architect