Paymate has tied up with IDBI Bank, their 8th bank partnership in India. The company also has a presence in Sri Lanka, and recently powered services for a partner (Paybill) in Nepal. Paymate claims to have tie-ups with around 13,000 merchants. Interestingly, since Paymate uses the Interactive Voice Response service to verify payments, so they don’t necessarily have to have a tie up with telecom operators.
Paymate competes with MChek, NGPay and Obopay in India. Do see our list of digital payment companies here. We compiled a list of their banking partners, based on what has been mentioned on their websites, and it does seem strange that HDFC Bank has tieups with MChek, Paymate and NGPay. How does this work – does the bank give customers an option to choose any one? Sure will be confusing for a customer.
Note that MChek has tied up with State Bank of India (SBI), which is India’s largest Public Sector Bank, ICICI Bank, India’s larges private sector bank, and HDFC, another large private sector bank, though I can’t quite understand what is going on with HDFC, given their multiple tie-ups. The following situations are possible in this ecosystem:
1. Bank has the consumer interface: the bank will then choose the payment company, and will have to tie up with all telecom operators
2. Telco has the consumer interface: the telco will choose the payment solutions company which will have to tie up with all banks
3. Payment company has the consumer interface: which means it will have to tie up with all the banks and all the telecom operators.
4. Free for all: utter confusion with either banks tying up with multiple payment companies and/or multiple telcos. The consumer doesn’t know where to go.
Given the mobile banking guidelines, it appears that the bank has the consumer interface, and the onus is on the payment company to ensure telecom operator tieups. So it is likely that a bank will have only one payment company, and avoid confusion for the consumer. So what then is HDFC Bank doing?
Note (6th Jan 2008): the table above has been updated, following inputs from Paymate that the company has signed up with Lakshmi Vilas Bank, and Tata Teleservices on the telecom front.
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4 Comments until now.
HDFC Bank is hedging the bets. That way they need not worry about who wins the game.
What is the business model for these mobile payments companies and current size of these companies ?
What I presume from the article/ interpretation is:
A- The model which is being compared here is having basic difference from operational usage from the end consumer perspective.
B- the business model, which is taking shape for all M-commerce companies here in India (despite of not having a clarity/clear cut guideline from our regulator RBI); there would be more competition coming in to this sector as the general perception for mobile based transaction is “It would just do wonders to e-commerce arena as your mobile would open up many services for you- you can pay your electricity/water/mobile/insurance bill, book your airlines/railway/movie tickets, top-up your mobile and so on”.
And the only good point here is: irrespective of you are a Telecom operator or a bank; any customer who is enrolled with a M-payment operator; can use his bank account to use any service mentioned in above categories; independent of operator/bank- provided the arrangement is up and running.
I don’t see why HDFC cannot tie up with all the payment companies. Its like a bank accepting visa, mastercard, american express, etc. That gives a lot of flexibility to the customers, since they need not worry about if their payments are going to be accepted or not. Also, as an account holder in HDFC bank, one can also choose between the three different payment gateways and not be forced to take only one. I’m sure the bank charges a certain percentage of the transaction fees, so its in a win win situation all the way.