Indian Mobile Payments Struggling in India

To anyone who’s ever lived in the country, you know that it’s tough to find connectivity. This means a lot of major advancements often take longer to reach those rural dwellers because they’re more spread out, which means a reduced return on investment. A recent study from the National Payments Corporation of India (NPCI) suggests that, indeed, there are some issues here.

The word from the NPCI is that there were actually a fairly large number of rural users of both the Bharat Interface for Mobile (BHIM) mobile money transfer application and the BHIM-Aadhaar merchant payment system. However, many of those users actually left the system of their own accord, citing poor quality user interface. Poor awareness also seems to be a factor, resulting in large numbers of users who “…have either deleted the application or are inactive.”

Currently, BHIM has seen around 20 million downloads, but not even a third—less than 30 percent—have made the connection between the app and established bank accounts. Users also aren’t engaging in much in the way of transactions. Word from “a person with direct knowledge of the matter,” who told the story to The Wire, noted that the NPCI understood that BHIM wasn’t taking off the way most had expected, or even hoped, and wanted to learn more about why the launch wasn’t running smoothly.

One major potential problem with BHIM-Aadhaar is that it’s got some rather tight limits on it. There’s a Rs 2,000 ceiling for every transaction, which works out to about $31.19 US. That’s not too far off the limits seen in the UK mobile payment market, and merchants out there were pretty eager to get that limit lifted at last report.

So we have three different issues working against the BHIM system at once: we have issues of awareness, commonly fixed with a certain amount of free goodies and promotional campaigns. We have issues of interface design, which will take a bit more work to overcome. Lastly, we have issues of transaction restriction, which we’ve already seen overcome in other places with a little extra boosting.

The BHIM system does have its share of problems, but there shouldn’t be much wrong here that a few basic changes can’t readily fix. Getting the users to come back might be tougher.