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March 27, 2017 • Issue 17:03:02

Global digital payments beckon

It's a shift unlike anything witnessed before. "They're
skipping over plastic [card payments] and going straight to
mobile money," said Harold Montgomery, Chairman and
Chief Executive Officer of MoneyOnMobile Inc. (MOM).
Indeed, a report by the business consulting firm RNCOS
projected nearly 200 percent growth in the Indian mobile
money market between 2016 and 2022.
Mobile is big

MOM, formerly Calpian Inc., is based in Dallas and had
specialized in payment processing services for U.S. ISOs
and merchants. In September 2016, the company sold
off its U.S. operations and changed its name and market
strategies to focus on India. The company has been
operating a mobile phone-based payment network in
India since 2012, catering specifically to India's estimated
1.2 billion unbanked and underbanked consumers.
By Patti Murphy
Indian consumers make cash deposits to MOM accounts
lobal electronic payments received a major using registered agents who in effect convert the cash
boost last year when the government of India
effectively removed 80 percent of the nation's to digital currency, which consumers can then access
G banknotes from its payment system. It was to pay bills and make other transactions using SMS
a dramatic move – said to be aimed at ridding India of text messaging. As of February 2017, MOM had 325,000
retail points of presence in the Indian market, and those
bribery and black market sales – with a potentially dra-
matic economic impact. And it's expected to accelerate the merchants were being frequented by at least 8 to 10 million
accountholders each month. "Our processing volume grew
global transition to digital payments.
119 percent from December to January," Montgomery said.
By eliminating the two most popular denominations of
currency (a process known as demonetization), the Indian In January, the company heralded the launch of MOM
ATM, which will allow consumers to use their mobiles
government is forcing more than 1 billion of its citizens
who have lacked access to the financial mainstream to to withdraw cash from their MOM accounts through
participating merchants that effectively act as ATMs.
accept and make payments using mobile phones (which
most, if not all households can access).

A 2016 study published by Visa Inc. revealed that heavy Contributed articles inside by:
reliance on cash (over 90 percent of transactions last year)
costs India 1.7 percent in gross domestic product (GDP).
Foregone tax revenues from India's "shadow economy" Brandee Elitch ........................................................................................24
cost about 3.2 percent of GDP. "Such a huge burden on the John Tucker .............................................................................................44
economy offers the government of India a clear rationale Adam Atlas ..............................................................................................46
for accelerating the shift from cash to digital payments,"
Visa wrote.
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