Spice Money: Industry Monitoring 02 March to 05 March 2019
- Priyanka Kanodia
- Mar 6, 2019
- 5 min read
Spice Money
Competitors
Affordable housing business likely to boost outlook for Bandhan Bank
Publication- Business Standard
Edition- Online
Date- 02 March, 2019
After months of subdued sentiment, recent developments suggest Bandhan Bank's investors can expect better times ahead. A slash in the goods and services tax (GST) from 8 per cent to 1 per cent on affordable housing — announced earlier this week — has provided some relief to investors.
The development should provide an upward thrust to the recently approved acquisition of Gruh Finance — an affordable housing arm of HDFC. Subdued demand in the real estate sector had made investors pessimistic about growth of the expensive acquisition by Bandhan.
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Industry News
Unified Payments Interface clocks 674 million transactions in February, continues growth momentum
Publication- The Economic Times
Edition- Online
Date- 02 March, 2019
Unified Payments Interface, the instant inter-bank fund transfer mechanism has clocked 674 million transactions in the month of February, as per latest data released by the National Payments Corporation of India which runs the payment rails. This is a slight jump of 0.3% against January where the transactions stood at 672 million. February with 28 days has still managed to report a more than 10.9% average daily transaction growth, said NPCI. Comparing year on year the jump stood at almost 300%, last year in February UPI had clocked 171 million transactions.
In terms of value of transactions, February reported more than Rs 1 lakh crore worth of transactions. This is the third month in a row that NPCI has reported more than Rs 1 lakh crore of transactions on UPI. Besides UPI, NPCI also shared numbers around IMPS, another inter bank fund transfer mechanism. In case of IMPS, the February figures stood at 166 million in terms of number of transactions and for amount of money that was transferred it stood at almost Rs 1.5 lakh crore. IMPS is typically higher value transfers, while UPI has major use case of small value peer to peer transactions and micro merchant transactions. In its February 11 edition ET wrote that Paytm was leading the race in terms of number of transactions on UPI in January with more than 220 million transactions, closely followed by Google Pay and PhonePe. With mobile wallets falling out of favour in the retail payments space, UPI has been gaining tremendously.
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How FinTech segment is being shaped in different geographies
Publication- The Economic Times
Edition- Online
Date- 02 March, 2019
The advancements in technology have impacted every domain in the global economy, and the financial space is regarded as one of the biggest beneficiaries. An erstwhile conventionally managed segment, it has suddenly become abuzz with the term 'FinTech', with the number of products, services, and competitors increasing at the speed of thought. In such a robustly changing and highly competitive scenario, FinTech players are left with no choice but to constantly adapt and charge forward in order to carve a niche for themselves in the space.
With newer trends emerging every other day, the FinTech landscape has been witnessing varying yet just as significant transformations around the world, shaping the segment in its own way everywhere. With new technologies and significant investments on the rise, the financial landscape in the UK is reshaping in terms of transaction processes and in the way banks operate. UK has emerged as the pioneer of 'Open Banking' across the globe, putting the country's banks and FinTech companies at a distinct advantage over their competitors through seamless integration. 'Open Banking' refers to a part of FinTech that leverages open APIs which enable third-party developers to build regulated applications and services around the financial institution.
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Unauthorized surcharging impeding online payment system: Study
Publication- The Economic Times
Edition- Online
Date- 03 March, 2019
Unauthorized surcharging and high MDR charges are some of the reasons for impeding growth and sustenance of digital payments despite all efforts to promote it, according to a study. "This is, inter alia, due to the distortionary pricing of payment products (i e MDR) and the continued fraudulent practice of surcharging by acquirer banks and big merchants." "Small/medium merchants on the one hand and customers on the other hand are losing out, hindering the government's intent of broad basing digital payments," as per the study done by IIT Mumbai.
It is estimated that the merchants were burdened with nearly Rs 10,000 crore towards credit card Merchant Discount Rate (MDR) in 2018 alone, it said, adding that this is exorbitant in contrast with the overall cost of Rs 3,500 crore towards debit card MDR, even though in value terms, credit and debit card transactions are nearly the same – Rs 5.7 lakh crore each in 2018. The study done by Ashish Das, a professor of statistics, highlighted that unauthorised surcharging has also burdened the payment system users with huge additional costs.
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https://economictimes.indiatimes.com/industry/banking/finance/banking/unauthorised-surcharging-impeding-online-payment-system-study/articleshow/68243168.cms
Blockchain startup InsinoVentures raises funds to escalate their services to international market
Publication- The Economic Times
Edition- Online
Date- 04 March, 2019
Gurgaon based blockchainstartup Insino Ventures has raised an undisclosed amount of angle funding from a pool of HNIs. The company will use the funds for expanding to new geographies, strengthening its product and developing technology. It is also looking to invest in international market by the end of this year. Insino Ventures is a blockchain and ecommerce startup headquartered in Gurgaon and Jaipur and founded by Animesh Joshi and Sanjay Goswami in 2018. The company providing service in cutting edge technologies in blockchain, Artificial Intelligenceand Machine Learning to name a few.
It has a dedicated product development team working on major flagship products, out of which one will be soon production ready and will go live by the end of this quarter. Commenting on the fundraise, Animesh Joshi, the Co-founder of Insino Ventures, in a statement said, "The company aims to use the funds to invest in marketing and spread the company’s products abroad.This funding is a significant milestone in allowing us to expand the business, strengthen development and create value in the market with our features."
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You still bear e-pay surcharge on govt & utilities websites
Publication- The Times of India
Edition- Online
Date- 04 March, 2019
Several government agencies and public utilities are disincentivising e-payments by refusing to bear transaction costs charged by banks even as the Modi administration promotes digital India. Banks are passing on the cost of online payment to customers in several e-portals. In some cases, not only are charges being illegally passed on, the amount is also higher than what banks are allowed to charge merchants as fees. Electricity consumers in Delhi have to pay 1% extra on their bill amount when they make payments through UPI. Consumers of Tata Power end up paying a surcharge when their bills are over Rs 2,000 in Mumbai and Rs 5,000 in Delhi. For train tickets booked on IRCTC, the most widely used e-commerce portal, customers are charged Rs 10 plus GST for UPI transactions over Rs 2,000. These are only illustrative examples and there are many other instances of agencies where the surcharge is passed on to customers.
A study on surcharges in digital payments by Ashish Das, department of mathematics, IIT-Bombay, has shown that despite a well-meaning policy and directives against passing on the surcharge to customers by the RBI, banks continue to facilitate surcharging. “Unauthorized surcharging has also burdened payment system users with huge additional costs. Just for online payments, it has led to extortions by the acquirer banks and their payment facilitators/aggregators to Rs 200 crore in 2018 alone,” said Das in the report. Several government agencies and public utilities are disincentivising e-payments by refusing to bear transaction costs charged by banks even as the Modi administration promotes digital India. Banks are passing on the cost of online payment to customers in several e-portals. In some cases, not only are charges being illegally passed on, the amount is also higher than what banks are allowed to charge merchants as fees. The surcharge that is passed on to the customer is illegal. The RBI, in a notification on December 27, 2017, had asked banks to ensure that merchants do not pass on MDR.
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