“At 50 million cards, India will still not be cashless society, but it will be substantially increased usage. The size of this market is humongous and we are confident that card usage patterns will change,” Mr Murray said. He also said that India is the second most promising market in the asia-Pacific region along with Malaysia with South Korea being the largest.
The biggest factors inhibiting the growth of the market in India, according to Mr Murray, are lack of customer education and the high cost of installation of terminals. “Once people get introduced to the card payment mechanism, its convenience and security, they will start using cards for payments. Indian customers are open to such concepts and that can be established through the success of mobile telephony and automated teller machines (ATM) and there is no reason that they will not embrace the cards product. Indian customers are willing to pay for convenience,” Mr Murray said. A cost of a terminal is $500 or close to Rs 25,000. In addition, there are installation and maintainance costs. This makes the installation unviable at non-premium organisations.
“Economics does not make sense to put terminals in smaller establishments. We need to come up with something that works keeping the Indian scenario in mind at relatively lower costs,” Mr Murray explained.
He also mentioned that India lags behind as compared to its peer markets and a lot of work needs to be done in order to get India to the level it deserves.
In the same regard, he welcomed co-operation of the government, organisations, telecom industry, postal department, railways, etc for helping the market grow. Communication plays the most important role when the market is growing. Electronic payment mechanism helps the government curb the parallel economy as all the transactions are recorded. Citing the Korean example — wherein tax breaks were extended to electronic payments given the ready audit trail, Mr Murray said that Visa would like if the Indian government adopts a similar structure. In this regard, Visa has supplied information to banks and various other concerned authorities who in turn have made presentations to the government at various levels including the Ministry of Finance for enforcing a similar model in India.
The Internet too is slated to become a main stream channel according to Mr Murray. “Although it is where a lot of potential exists, currently it is a very small segment. But we are sure it will pick up in the future.”