NFC mobile payments are not the only way financial institutions can enable consumers to pay with their smartphones. Axis Bank is introducing a different approach with its Lime Wallet, which uses an encrypted audio signal to transmit payment information between devices when consumers make a transaction.
The service allows users to fund the wallet with a credit or debit card and make payments through the Lime Pay feature. While the technology offers a range of capabilities, including peer-to-peer transfers and bill payments, merchant acceptance could prove to be a significant challenge. Without widespread in-store integration, consumers may have limited opportunities to use the payment feature.
Axis Bank, one of India’s leading domestic banks has announced the launch of a new mobile payment service for in-store use that enables customers to make payments via an encrypted audio signal generated by their device. According to Axis Bank to use the service, customers transfer funds from their credit or debit card into their Lime Wallet and then can make payments in stores and in third-party apps by clicking on a Lime Pay button.
Commenting on the service, an Axis Bank representative told NFC World,
“The pay feature will allow Lime users to make app-to-app payments from Lime by using an encrypted sound signal which contains the user’s Lime ID and payment token for completion of the payment. The user and the sender will receive a payment confirmation message. For now, there isn’t any in-store integration. The merchant will have to use his or her smartphone to accept the payment.”
While the feature functionality of the Lime Wallet is impressive and includes the ability for consumers make online and bill payments, peer-to-peer money transfers, split bills, and create shared wallets with friends and family among other features, the statement by the Axis Bank representative highlights the Achilles heel of the Lime Wallet service.
The fact that there is no in-store integration and that the service relies on merchants to accept the payment via their own mechanisms will slow adoption and use as merchants are unlikely to rush to add additional payment acceptance methods. While it appears this is a temporary issue, ensuring that merchants are onboard with new payment methods is as important as generating consumer interest and use in the new product.
Axis Bank’s Lime Wallet demonstrates how mobile payment technology can move beyond traditional NFC-based approaches. Using encrypted audio signals creates another way for smartphones to exchange the information required to initiate a payment while supporting additional digital wallet services.
However, the success of NFC mobile payments and competing technologies ultimately depends on more than consumer functionality. Merchants must also have a convenient way to accept the payment method without adding unnecessary complexity at checkout.
For Lime Wallet, expanding merchant integration will be critical to building broader usage. Even an innovative mobile payment service can struggle to gain traction if consumers cannot easily use it at the places where they regularly shop.
Overview by Tristan Hugo-Webb, Associate Director, Global Payments Advisory Service at Mercator Advisory Group
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