ICICI Bank wallet

ICICI Bank‘s digital payments product Pockets will now allow users to make cashless payments from their smartphones at physical stores, e-commerce websites and deliveries at home. The feature has been enabled by Visa’s new mobile payment solution mVisa.

To begin with, the feature has been introduced in Bangalore with 1,500 merchants. The bank said it will shortly extend this facility to other cities as well. So far, ICICI Bank says Pockets has seen two million downloads since its launch in February.

Users can make payments using their debit card by simply scanning a mVisa Quick Response (QR) code at a merchant location without swiping the card. Customers will have to click on the mVisa icon on the home screen of the Pockets app which automatically activates the camera in the phone, allowing customers to scan the QR code. The QR code identifies the merchant location and users will then have to enter the amount to be paid. Customers can then choose the debit card saved on the app and enter the PIN to complete the transaction.

Note that ICICI Bank had launched a Facebook banking application called Pockets in 2013 and the new wallet was an extrapolation of the existing product. It’s also worth noting that in August mVisa launched in Bangalore and said then that it would be available to 20,000 merchants in the city. Other banks tied up with mVisa include HDFC Bank, Axis Bank and State Bank of India.

MediaNama’s take

We’ve mentioned before that the point of sale penetration in the country is abysmal. According to latest RBI data, the total number of POS terminals in the country are 1,125,675 as of April 2015. Compare that to 564,707,913 debit cards and 21,288,891 credit cards in circulation. An Ernst and Young report points out that the country has the lowest POS terminal penetration in the world. The report further adds that there are only 693 machines per million of India’s population, compared to similar emerging countries such as Brazil, which has 32,995 terminals per million people and China and Russia, each of which has around 4000 terminals per million people.

Payments through smartphone apps should make them a lot more simpler. A QR code sign at a supermarket could act as a substitute POS terminal and bypass the need for maintaining a separate device for swiping cards. However, it remains to be seen how this technology will be adopted and if more merchants will adopt it as a payment method. Adoption by customers is also crucial. Note that Pockets only has two million users and there are a number of other payments applications by rival banks vying for the same space.