Wallet365- India gets its own PayPal

The Times of India group has launched Wallet365, an online payment system that is almost completely on the lines of PayPal; I say almost, because there is one way in which it differs from PayPal, and that difference could well be its raison d’etre. For Wallet365 lets you make online payments for goods/services that are denominated in Indian rupees (INR), something you can’t do currently with PayPal in India. And this is what makes PayPal practically irrelevant in the Indian context.

For those who are familiar with PayPal, Wallet365 works in exactly the same way. It is being marketed as an ‘E-Wallet’, which enables individuals and businesses to make payments to one another in an easy, secure and affordable manner in real time & completely online. All you need is an email id. Individuals can send/receive money electronically, make online purchases, pay utility bills online or store money electronically for future purchases. Merchant establishments can collect payments safely and securely from online buyers, obviating the need for credit cards. Wallet365 has been launched by Times Money Ltd., a subsidiary of the TOI and the financial backend (payment gateway) is provided by Yes Bank. To facilitate online shopping and paying bills, Wallet365.com has signed-up with over 100 merchants. And it will surely get a huge push from online transactions on Indiatimes.

I have never been a fan of TOI’s online (ad)ventures. They are too diversified (newpapers, media, television, radio, movies etc) to have a particularly coherent vision for their online presence; I think they treat their online ventures as just another sales channel. But with Wallet365, you have to give them the credit of thinking ahead of the industry. For they have correctly diagnosed that the biggest obstacle to Indian ecommerce is people’s unwillingness to use their credit/debit cards online. Since this service takes e-commerce beyond credit cards, customers no longer need to worry about sharing confidential credit card data online. Wallet365 could help to take the fear out of the user’s mind and act as a catalyst in getting many first-timers get initiated into ecommerce. And given their dominant position in Indian media channels, they can get the word out about Wallet365 pretty effectively.

Check out what the IAMAI 2006 report has to say about online payments –“Online bill payment is still in its infancy, but the potential is staggering. According to research, the number of Indians paying bills online is expected to increase from the current 0.3 million in 2005-06 to 1.8 million by 2007-2008. Netizens will increasingly adopt online bill payment for factors such as convenience, control, trust, privacy, and improved record-keeping . ”

It is also worth noting that out of the Rs 600 crore online turnover in 2005 in India, a big majority (almost 75%) is travel related websites i.e. Indian Railways, low cost airlines etc. The contribution of other online merchants establishments in this annual figure is actually quite miniscule. That’s another pointer to the typical Indian aversion to transact online unless there is no other option (as is clearly the case with railways).

Actually, Wallet365 is NOT India’s first online payment solution of this kind. The first to do so was bazzee.com (now eBay India) with its Indianised version of a PayPal kind of payment mechanism called PaisaPay. I would speculate that PaisaPay was also created for similar reasons as Wallet365 i.e. because of PayPal’s inability to honour INR denominated ecommerce transactions. But PaisaPay is just an internal payment mechanism on the Bazzee/eBay website.

The TOI group has an unassailable position amongst media related businesses in India. I think they have made a very smart move by launching Wallet365. But to make this an ecommerce industry standard in India, you need more than just clout or influence; you need to have a consistently focused vision. The diversified nature of their group’s activities may well prove to be the ‘spanner in the works’ for Wallet365.