MUMBAI: HDFC Bank is drawing on its clout as a banker to most of the e-retailers to launch a digital wallet and an electronic marketplace for various online merchants. Once an accountholder or cardholder (even non-HDFC Bank debit and credit cardholder) registers for a digital wallet, he can transact on most websites using only wallet credentials.
HDFC Bank’s entry is significant considering that it is the market leader both as a card issuer and in processing card payments for merchants, and accounts 40% of e-commerce transactions. Also, the digital wallet – which can be accessed from a mobile app or online – will be enabled for contactless payment using Near Field Communication (NFC) by flashing the phone in front of readers that can accept NFC payments.
The bank is betting big on the wallet because it is now seeing a shift in e-commerce from desktop to mobile phone. Whether it is tickets or consumer goods, mobiles account for half of purchases in terms of number of transactions. But the complexity of entering card details onto a phone screen also leads to high level of failed transactions. A wallet meets RBI’s requirement of two-factor authentication but does away with the hassle of filling card details every time.
“In a standard credit card purchase, the number of steps can go up to 11-12 including filling in the 16-digit card number, name, expiry date, CVV and other details. Our digital wallet will enable the transaction to be completed in two steps, which substantially cuts down the failure rate on mobile phone purchases, which is as high as 50%,” said Parag Rao, senior EVP and head (card payment products) at HDFC Bank. He added that customers also do not want to store their card details on third-party websites. “In the case of a bank, the details are in any case entrusted to us,” he said.