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Gen-Y sees totally cashless shopping coming, says survey

A Visa survey found that eight in 10 Millennials believe that they will one day be able to do all their shopping and bill payments online, while 73% believe this will be possible with a mobile phone


Thriving on a diet of online shopping, mobile banking and virtual games, young generation or Gen-Y believes that in future, new technology will allow them to dispense with cash totally, says a survey.


The research was conducted between June and July 2011 and more than 5,500 Millennials from across 11 countries including mainland China, Hong Kong, Indonesia, India, Philippines, Russia, Singapore, South Africa, South Korea, Taiwan and the UAE were interviewed by Visa.


According to Visa’s “Connecting with the Millennials” study, which featured interviews with over 5,500 young people across Asia, Russia and the United Arab Emirates (UAE), eight in 10 Millennials believe that they will one day be able to do all their shopping and bill payments online, while 73% believe this will be possible with a mobile phone. Visa defines ‘Millennials’ as those born between 1981 and 1991 and aged between 18 and 28 years at the time the survey was conducted.

We believe the Millennials play a significant role in boosting electronic payments in India: they have an active digital lifestyle and are constantly embracing new payments technologies. At Visa, we see mobile/online payments as a game changer and are providing the Indian Gen-Y with advanced and robust electronic payments technology to drive growth towards a cashless and a more efficient environment," says Uttam Nayak, Group Country Manager for India and South Asia, Visa.


According to the survey, a high proportion of Indian Millennials have an active digital life today and use their personal computer or laptop extensively for internet banking, online shopping, and bill payments. “Online shopping is becoming increasingly popular among young Indian consumers—they spend about 16% of their monthly disposable income online. Among those who purchase online, four in 10 make online purchases at least monthly, indicating a healthy appetite to buy online. However, 24% of the Millennials prefer cash on delivery as the most preferred payment method for online purchases, followed by debit card which is preferred by 21%," the survey said.

Debit cards are a preferred mode of payment for four out of every 10 Indian Millennials, and 47% prefer using it for high value payments of over Rs1,000. This shows a strong opportunity for growth of debit cards in the country in general.


The survey also identified an increasing inclination of Millennials towards electronic payment methods. 71% of the respondents look for security over convenience, acceptance, and flexibility when comparing different payment methods. The ability to pay after banking hours, usage while making unplanned purchases, maximizing rewards program, getting discounts and the convenience they provide over cash are the key drivers motivating the Millennials to use credit cards.


Interestingly, 38% of the Indian respondents who did not already own a payment card at the time of survey cited having a strong desire to own one in the near future, whereas 33% showed interest in owning a debit card and 24% in owning a prepaid card in the future.


Despite the steady growth of electronic payments in India, high inclination towards usage of cash is still seen as a key barrier in growth of non case transactions. According to the survey, Millennials still pay for 56% of the total expenses by cash. This is mostly true for payments of low-value products. Issues like low acceptance, uncomfortable for small purchases, apprehensions around mischarges and safety are among some of the barriers.


The future holds an enormous opportunity especially for mobile payments and online payments in India as 76% of the Indian Millennials wish that they could make all their payments using their mobile phone and 79% wish they would be able to make all purchases and pay all bills online, hence, driving the move towards a cashless future, says the survey.



HUDCO re-enters home loan lending with most competitive rates

HUDCO is offering home loans at a floating rate of 10.2% for loans up to Rs25 lakh, which is marginally lower than SBI's 10.25% interest for home loans of up to Rs30 lakh

Mumbai: State-run Housing and Urban Development Corp (HUDCO) on Tuesday said it has restarted lending for home purchases by launching a competitively priced product, reports PTI.
The corporation, mandated with affordable housing and urban development, will be offering home loans at a floating rate of 10.2% for loans up to Rs25 lakh, its regional office in the city said in a statement.
The interest rate on the product is better than the 10.25% currently charged by the country's largest lender State Bank of India, also the market leader in the segment with one of the most aggressive pricing, for home loans of up to Rs30 lakh.
"This makes it the most competitive home loan product available for salaried individuals in the major capital cities of India," the statement said.
The HUDCO statement said it will also offer other features like free personal accident insurance, no charges before sanction, and no pre-payment charges, which are offered by a host of players.
The home loan lending was frozen since May 2011 and has been re-started on 15th August, an official said, without giving the reasons for either the closure or restarting.
Additionally, HUDCO will not charge any processing fee till the sanction of the loan, unlike some commercial lenders who charge upfront, the official said.


Power bills in Maharashtra set to shoot up from September

With the upward revision to 20% from 10%, the FAC ceiling for MSEDCL works out to be at 94.91 paise per kilo watt hour, 99.9 paise for Tata Power, 128.4 paise for RInfra and 144.58 paise for BEST per kWh at the prevailing retail tariffs

Mumbai: Monthly electricity bills of consumers are set to increase from next month with the Maharashtra Electricity Regulatory Commission (MERC) hiking the fuel adjustment cost (FAC) ceiling to 20% from the present 10%, reports PTI.
"...The commission revises the average FAC ceiling to 20% of variable tariff for all distribution licensees in the state," MERC said in its order yesterday.
The revised FAC ceiling will come into effect (for the FAC allowable to be charged to consumers) from September onwards.
The FAC is a variable energy rate that can fluctuate each quarter with fuel and purchased power costs of suppliers.
The decision is bound to affect monthly budgets of consumers who are already reeling under high tariffs and will now have to factor in the hike.
Suppliers, including Tata Power, Reliance Infra, MSEDCL and BEST, have been claiming that rising fuel cost and earlier ceiling of 10% on passing this burden to consumers have further aggravated their losses.
After analysing the monthly FAC of all utilities, MERC had suo-motu proposed to increase the cap to 25%as it observed under-recovery of the cost in recent past. The state power regulator, however, relented only after the public hue and cry over its decision.
"...The commission has already clarified that there has to be a balance between the interests of the consumers and the utilities and the FAC ceiling has to be stipulated in such a manner that fuel cost incurred by the distribution licensees under normal circumstances is allowed to be passed to the consumers on a regular basis, subject to post-facto approval of MERC and only certain spikes due to steep fluctuations in fuel prices or other developments may not get passed through directly within the ceiling," the order said.
With this revision, the FAC ceiling for Maharashtra State Electricity Distribution Co Ltd (MSEDCL) works out to be at 94.91 paise per kilo watt hour (kWh), 99.9 paise for Tata Power, 128.4 paise for RInfra and 144.58 paise for BEST at the prevailing retail tariffs.


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