Taxi firms turn to digital wallet model

Close on the heels of e-commerce retailers, online car rental companies are getting digitally savvy when it comes to transactions. Mumbai-based Meru Cabs and Bangalore-based Ola Cabs have both launched digital wallets.

Other cab service providers like Savaari, Taxiforsure, TabCab, Uber and Mytaxiindia are also said to be in talks with firms such as Citrus, PayU and Paytm for creating a mobile or digital wallet. The latter is a payment system that lets people pay for the purchases or services using their phones, rather than with cash or credit cards.

Siddhartha Pahwa, CEO, Meru Cabs, told BusinessLine that with more and more people turning to the cab service for their daily commute, digital wallets tend to come in handy, as consumers do not have to worry about tendering the exact change, or finding an ATM machine during peak hours. Digital wallets offer customers the power to transact anywhere and anytime, opting from myriad payment modes in the most convenient manner.

Amrish Rau, Managing Director, Citrus Payment, pointed out that since time is of utmost importance in today’s fast-paced world, companies are seeking faster ways to make payments in a secure manner.

Industry experts said that with the increasing use of smartphones by consumers to shop and make transactions, companies are betting big on the digital wallet technology. It is already gaining acceptance among consumers in the developed countries.

Incidentally, the world’s largest mobile and technology company Apple launched iPhone 6 and a smartwatch with a digital wallet in it, allowing users to avoid cash and credit card payments.

A digital wallet can be used for payment for a trip, and can also be used at select outlets of third-party retailers. Customers register and load money into the app via their credit card, debit card or through net banking. This amount can be used at the click of a button from the app to make payments. Users can recharge their account for up to ₹5,000.

“Through digital wallets, consumers can also pay for the service used by their relatives or friends in some other city,” Pahwa added.

Meru has over four million registered users, and about 70 per cent of its bookings are via its digital app. Similarly for Ola, started by IITian Bhavish Agarwal and Ankit Bhati, 70 per cent of bookings come via the app, which is available across Android, iOS and Windows platforms.

The digital payment mechanism also helps service providers understand customers better, thereby increasing marketing return on investment (ROI), ensuring customer loyalty and reducing churn. They can provide customised promotional offers by monitoring customers’ buying habits, keeping track of their preferences and frequency of purchase, as well as responding to queries in real time.

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