A Journey into the World of Mobile Payments

Mobile Payment

India is witnessing a digital revolution especially in the Fintech and payment landscape. The reason could largely be attributed to the advent and innovation of smart technologies paving a way to new-age digital banking and mobile payment system in the country. Along with this, Government and other regulatory bodies in India are making all the necessary changes to move the country from a cash-based to less-cash and ultimately to a cashless society. Let’s explore more about Digital Payments in India, their rise, major challenges and solutions.

Rise in Mobile and Digital Payments

At one point of time mobile phones in India were regarded as an item of luxury, but now it has become an item of utility making mobile a low-cost mean to access digital payments.

Mobile Payment

Most Common Ways of Mobile Payments

Now let us check how you can use your mobile to make payments!

QR Code-based Merchant Payment

QR Code payments are gaining momentum as many wallet companies are relying on this mode of digital payment. It greatly reduces the cost of merchant set up in regard to POS terminal cost. Also the merchant boarding process is much simpler in QR-Code based payment.

How to works?

  • Every merchant wallet has an associated QR Code. The QR code sticker is normally displayed at the cash-counters.
  • For making the payment, the customer scans the QR code through their mobile wallets, enter the specific amount and choose to pay through the money in their wallet.
  • After the completion of the payment, an SMS or in-app notification is sent to the merchant and the customer.

Aadhaar-based Payment

To make Aadhaar-based payment, merchant needs a biometric scanner and an account linked to the Aadhaar database. Instead of biometric scanner merchant can also use the mobile phones with iris scanners. It further reduces the set up cost as eliminates the need of biometric scanner.

How it works?

  • Customer will scan his/her finger on biometric device or iris scanner enabled on phone.
  • Verification of the customer through the Aadhaar-associated account number
  • Transaction is processed
  • Transaction confirmed through SMS / in-app notification

UPI Payments

Each customer will get a unique ID from the UPI which will act as his/her payment address. Funds can then be transferred electronically using mobile and the unique ID.

  • Customer will login to UPI app as given by the Payment Service Provider (PSP).
  • Customer enters the amount and the merchant’s information
  • Authentication of the transaction by the customer using MPIN
  • PSP will process the transaction through the UPI network and authorize by the customer’s bank
  • The customer and the merchant get a payment notification
  • The merchant now logs into the UPI app and request a payment by entering the customer’s payment address and the amount.
  • PSP processes the transaction through NPCI and sends an authorization requests to the customer
  • Customer then approves the payment. Transaction is processed by debiting the customer’s account, crediting the merchant’s account and providing a transaction notification to both the merchant and the customer

USSD Payments
*99# is a USSD (Unstructured Supplementary Service Data) based mobile banking service from NPCI that brings together diverse ecosystem partners such as Banks & TSPs (Telecom Service Providers). Using *99# service, a customer can access financial services by dialling *99# from his/her mobile registered with the bank. The service works across all GSM service providers and handsets

  1. Fund Transfer using Mobile Number and MMID – User can transfer fund using MMID and Mobile number of the Beneficiary.
  2. Fund Transfer using IFSC and Account Number – User can transfer fund using IFS Code and Account number of the Beneficiary.
  3. Fund Transfer using Aadhaar Number – User can transfer fund using Aadhaar number of the Beneficiary


With the recent demonetization drive, e-Wallets companies in India have received a huge push. You can add money in your e-wallets from your bank via credit/debit cards or net banking which then can be used to make payments. E-wallets or mobile wallets are virtual wallets allowing customers to pay for almost anything and everything. Majority of wallets are closed wallets i.e. money transference between people with the same wallet or payments at merchants can be made who are authorised to accept from that particular e-wallet.

Mobile Payment Challenges

Though number of mobile payments are increasing in the country yet these are not free from challenges. Few of the hurdles are –

Need of Global Standards

In order to make the mobile payments a reality in India, we need to have standards and interoperability in place. Achieving international compatibility, common interfaces and use of single platform for making payments will increase the mobile payment engagement.

Poor Connectivity

Two/third of India’s total population is still rural, making it approximately 870 million people. Internet penetration in most of the remote areas and rural India is a problem. This impacts the speed of transactions and results in poor customer experience. Customer might rethink to make mobile payment if a solution to poor connectivity is not found.

Digital Literacy

A large chunk of India’s population is not tech savvy and uncomfortable in using technology for making payments. Customers need to be educated and the technology must be simplified further.

Security Concerns

Mobile payment in India can gain traction only if the security concerns are met and dealt with as data security is still an issue. Most of the consumers worries about the data being  leaked to some wrong hands during processing.

Mobile Payment Challenges 

Here are the solutions to the Mobile Payment Challenges –

Mobile Payment


Aadhaar Enabled Mini ATMs – A New Age Banking Solution

Cash Withdrawal - Spice Money Mini ATM

India is witnessing a Fintech revolution owing to technological advancements and various Government initiatives. One of the most talked about initiatives is Pradhan Mantri Jan Dhan Yojana which aims to ensure access to various financial services — savings bank accounts, availability of need based credit, remittances facility, insurance and pension to low income groups across India. However, the last-mile of cash-disbursal remains a challenge even today with only 2,25,000 ATMs for all banks against the population of about 1.2 billion.

Cash Withdrawal using ATM  – A challenge to unravel

Though the number of ATM per million population is increasing i.e. from 105 in 2012 to about 300 in 2017, yet ATM market is underpenetrated in India. The country has approximately 120 ATMs per million people.

ATM Market Comparison

  • US has about 1,500 ATMs per million people
  • China has about 350 ATMs per million
  • India has only 120 ATMs per million people

Also, the cost of operating and maintaining a conventional ATM is higher and includes factors such as 24*7 power availability and security. These factors make ATM an unviable option to scale up cash out facility in semi urban/ rural areas.

New Age Banking Solution – Spice Digital launches Aadhaar enabled Mini-ATMs

With continuous efforts to bridge the divide between the served and the underserved, Spice Digital has launched Aadhaar enabled Mini-ATMs and will be shortly offering the services to customers at Spice Money retail counters. We have been authorized by the National Payments Corporation of India (NPCI) to offer Aadhaar Enabled Payment System (AEPS) services.

This service shall bring rural masses and low income groups at par with their urban counterparts. Technology and Aadhaar would play an imperative role in bridging the digital divide in India by extending banking services to all including low income groups.

A user can visit any Spice Money retail outlet near to their home or work to withdraw cash by providing the following details –

  1. Issuer Identification Number (IIN)– It is a unique, six digit number issued by NPCI to bank. Previously known as BIN or Bank identification number, IIN identifies the bank to which the customer has mapped his/her Aadhaar number.
  2. Aadhaar Number
  3. Fingerprint captured during their enrollment
  4. Amount to be withdrawn

With mini-ATMs withdrawing cash is now easy, secure and convenient. Read our blog – AEPS – Leading a Way to New Age Banking to know more about Aadhaar enabled payments.

Interested to join our team! Visit our page – b2b.spicesafar.com

Sound Based Payments – The way to go forward

what is sound based payment technology

The magical combination of increasingly connected world, technological innovations and expanding mobile phone market is greatly transforming Fintech industry. India currently is witnessing a transition from a traditional cash driven to cashless economy. Amid this revolution, Finetch firms are embracing technology and leveraging growth of mobile owners to make payments much easier and secure for the end users.  Latest ship at the dockyard of technology is “Sound based Payments”. This radical technology is definitely a game changer enabling payments without Internet connectivity.

While our devices are ever more connected, but still poor connectivity while using Internet is a big hurdle for making payments. In such a case, data is transferred using peer-to-peer connectivity like Bluetooth, Wi-Fi Direct, or Near-field communication (NFC). But again, these solutions have specific requirements of hardware and APIs which may not be available in all the devices. However, every device comes with a microphone and a speaker. So here comes an alternative, i.e. data transmission using sound waves.

Thus, use of sound based transmission in the form of “Sound Based Payment” is going to benefit the Fintech industry the most. Such payments work independently of Internet connectivity or communication tool such as NFC to enable payment. User can offer payment from smartphones, feature phones, card swipe machines and point-of-sale devices with the use of sound.

Benefits of sound based payment

Working of Sound Based Payments              

Sound based payments can be made by anyone having a bank account and a mobile phone. Using a unique ultra high frequency encrypted sound-based technology will enable you to pay directly from any of your bank accounts or credit/debit cards to the merchant account offline.

In the process of Sound wave technology, data is encoded into sound waves with the help of an algorithm which can then be transmitted to make offline payments. To make this happen, algorithm has to be integrated in the buyer’s mobile phone as well as the merchant’s phone or card readers.

  1. Merchant enter payment detail like bill amount on his device
  2. Numbers are converted to analog format with using the Algorithm
  3. Encrypted analoged data is transmitted to buyer’s phone as a sound signal
  4. Buyer’s phone is placed near merchant’s device to receive signals
  5. Buyer’s phone receivess data and decrypts the received data.
  6. Payment can then be made using debit card / credit card / digital wallet.

Working Prototype:

Using this technology we have built a prototype. This prototype has an input field where you can type the text you want to send. When you press the “Send” button, the data is continuously broadcasted alternatively with the Barker code. When another user is close enough to pick up the signal he can press the “Receive” button to get the data on his phone.  If the decoding failed (probably due to the surrounding relatively strong interference), it continues to monitor a sound wave transmission, continue decoding.

It is the magical new way to share your stuff – using sound. We can easily transfer any data and it would just require one action from the sender (starting to broadcast) and one action for the receiver (starting listening to all broadcasts).