The dearth of currency notes after demonetisation forced many people to adopt cashless transactions and made the providers of digital transaction facilities popular in India in 2016.
The dearth of currency notes after demonetisation forced many people to adopt cashless transactions and made the providers of digital transaction facilities popular in India in 2016. Since then digital transactions in the country have witnessed a surge in number of players and innovative ways, aided by rapid advancement in technology.
The advancement in digital payment technology and its adoption post demonetisation made life easier for the tech-savvy Indians during the countrywide lockdown imposed to contain the spread of Novel Coronavirus Covid-19.
“Digital payments played a key role this year, but the year also witnessed the impact of Digital lending, as an increased number of merchants and consumers embraced BNPL (Book Now Pay Later). On Simpl, we onboarded 1500 category leading merchants in the last quarter which is indicative of the shifting consumer preference to pay later. We expect these numbers to grow significantly in the coming quarters,” said Nityanand Sharma, co-founder and CEO of Simpl.
Advancement in Artificial Intelligence (AI) and Machine Learning (ML) technologies has also played a key role in e-commerce.
“The integration of AI/ML in credit decisioning will gain deeper significance given the need and its efficiency to detect and prevent fraud as we get ready to welcome more digital transactions over cash. We also foresee good traction on the user experience side of the coin as consumers seek secure, fast, transparent, glitch-free payments experience. The simplicity of payment experience will be key in establishing digital payments’ over cash once we come out of the shadow of the lockdown,” said Sharma.
“There will be continued Preference of e-commerce payments on a mobile device with more and more consumers embracing touchless payments,” he added.
Talking on the growth of digital payments, Ankit Gera, co-founder of Junio, said, “India is the world’s fifth-biggest online customer base and the majority are using mobile data. This is powering digital payments in India. Wallets like Paytm, Mobikwik became popular during demonetisation and this year we have seen exceptional growth in UPI. With the support of big players like Google Pay, Phonepe – UPI has surpassed wallet payments by a big margin. With WhatsApp getting the final nod to launch UPI payments, the growth of UPI is not going to slow down.”
Gera believes that the hike in transaction limit on contactless cards will also benefit e-commerce.
“The contactless “Tap and Pay” is something that is slowly gaining popularity among cardholders. RBI has recently increased transaction limits of “Tap and Pay” from Rs 2,000 to Rs 5,000. This should now comfortably cover 99 per cent of the payments done through a card at a retail shop. “Tap and Pay” has the potential to become more popular than QR based payments (UPI and Wallet) because it’s more user friendly,” said Gera.
While contactless card payments are easier than making QR based payments, vendors prefer the QR as it’s cheaper than keeping a swipe machine.
“You just tap your card on a swipe machine and payment goes through compared to taking out your phone, scanning QR, entering the amount to pay, and then completing payment. Swipe machines need to become more affordable for small shops. Retailers prefer “QR based Payments” because they don’t need to pay a monthly rental for QR and also Paytm, Phonepe, GooglePay don’t charge MDR,” said Gera.