You may have different answers according to your political
bias. But to me its pure luck.
Indeed, the demonetization of large
value currencies boosted the growth; but there are some interesting facts in
this move/growth. PayTM founder received
the license “in-principle” as payment banker on August 19th 2015,
along with other 7; which included Reliance, India POST, Airtel and Vodafone...
Payment banking have limited set of
operations when compared to the normal banks. But Mr Vijay Shekhar Sharma
had a clear plan on how to use the facility which he executed well. Parent company one97 incubated PayTM way back
in 2010. They would have been another start-up which tried something and just
rolling; but in 2016 demonetization changed the complete game for them.
It’s the cancellation of 500-1000 currencies
along with introduction of 2000, which made difference. People use PayTM for smaller payments; most of
the high volume transactions are still done via Banks. When we got 2000-rupee currency, the next
smaller one was 100. So getting change/balance for 2000 rupee was
difficult. Signing up and performing
transactions are pretty simple in PayTM, so there is no wonder in the spike
seen on the subscription and rolling amount via PayTM in recent financial turmoil.
Now let’s see some facts –
Modus operandi of PayTM: Compared to the solutions available on market,
its unique. But nothing so new about the technology used; it’s a mix of
available, convenient methods
Why Banks didn’t try such solution, which is relatively easy
to rollout for them: most probability
due to the fact that, bank-to-bank transactions should get enroute RBI. In this
case of PayTM, the database is same. i.e
similar to SBI to SBI payment. When we
see more competition for PayTM, mostly it may come from Reliance, it will be
the same scenario. PayTM’s goal will be to gain as many customer base as
possible before another player walks in to the blue ocean. For the same reason Mr Mukesh Ambani rolling
out the services within no time. They all
are quick decision makers and that’s the secret of their success.
Security of PayTM transactions: I am not sure about the security of the
transport tunnel, so am not commenting on that.
But the interfacing mode is either highly risky or myth-buster; anybody who have access to your mobile can make transactions from your wallet.
Do you remember the message that appears in online banking
portals to close the browser after logging off from the banking website? It is advised to avoid hack into the session
of user. That why the banking sessions are timed out if idle for some X
minutes. Well, this can be tricky as
well; banks do not want users to consume server resources for longer time.
But let’s assume the statement – live, longer, bank sessions are prune to cyber-attacks, is true, then, on an immature mobile platform, fintech solutions like PayTM will burn your fingers. It’s just a matter of time. Other the other hand, if it was myth, then it’s better to have more competition in fintech, for better and convenient solutions to the public where “service to general public” is considered as burden than liability.
PS:
The statement – do not trust immature, evolving security technologies,
to me, personally sounds like words of wisdom.
I have no intention to defame PayTM or to create panic among
its users. I as a user, I am just sharing my thoughts.
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