Payment methods have undergone innumerable transformations ever since mankind put a price on material things. From using the barter system, we have evolved to using digital modes of payment today with just a click on our smartphones, signifying our collective progress as a species. India, on the other hand, is majorly a cash-dependent economy. However, recent times have seen a major rise in the usage of digital payments from not just metro cities but also the tier-II, tier-III and tier-IV cities, and even in rural pockets of the country. Digital payment solutions are now widely accepted throughout the world for almost every industry – be it retail, e-commerce, food delivery and even kiraana stores in some cases.
The current global scenario, amidst the COVID-19 pandemic, has only further promoted the usage of digital payments. With the virus’s highly transmissible nature, cash payments are being discouraged since the source of the currency notes is unclear. In the post-COVID-19 world, digital cash will be the king. Let us take a look at what the future might be for the digital payments industry.
Shifting consumer behaviour
One of the reasons that the digital payment segment has achieved immense progress within a short span of time is the shift in consumer behaviour. Although a significant number of Indians still use cash as a preferred mode of payment, a considerable number of citizens are adopting digital payment solutions. With the pandemic taking the world by storm and the ever-increasing number of cases within the country, we are witnessing a fundamental change in consumer behaviour. To say the least, digital payment solutions are convenient and are becoming increasingly popular amongst the masses.
Top-rated security and encryption
No one likes to lose their money unnecessarily or have it siphoned off by fraudulent hackers. With several instances of internet scams such as money laundering and phishing, security is a key element. People would always prefer to use a digital payment platform that offers maximum security. To attract more customers and retain their existing ones, digital payment portals need to constantly upgrade their security and encryption systems to keep customer data and money safe. To do this, fin-tech companies are leveraging cutting-edge technologies such as AI, ML and blockchain to create state-of-the-art security systems which ensure the customers’ money is secure.
Easy access and usage
As of December 2019, India had 502.2 million smartphone users which are approximately 77% of the Indian population. This number is bound to increase soon with advancing technology and will pave the way for more and more people to switch to digital payment methods. Aside from this ease of access, the simplicity of the payment platforms’ user interface is another reason why digital payment methods have managed to gain popularity and an ever-increasing customer base.
Technologies such as AI, blockchain and ML are not only allowing companies to ensure a high level of security for their platforms, but they also make it simple for users to navigate through the digital payment systems. Features such as Unified Payment Interface (UPI) and QR code scanning have simplified the payment process to a great extent. All one needs to do is simply register some basic information and with just a click they can make/receive payments.
Building the trust factor with the re-introduction of Khaata
Indians have always been familiar with the Khaata system of payments, wherein customers would pay the entire bill at one-go, typically by the end of the month, instead of paying small amounts every time they make a purchase. While this system remains a common practice in small towns and rural areas, fin-tech companies are adding a fresh spin to the age-old concept of Khaata. Built on the same buy-now-pay-later model, these companies have introduced digital Khaata, which enables customers to enjoy a seamless buying experience without having to disclose their bank details or go through multiple authentication steps. Customers can just pay the total amount at a convenient time through their preferred mode of payments platform. The adoption of digital Khaata is already gaining traction in India, and it will likely see further acceleration post-COVID.
Digital payments are quickly gaining traction in the country and although the shift is gradual, it would be permanent and will play to our benefit. While cash payment methods are not obsolete yet, there is no question that the adoption of digital payment solutions is bound to skyrocket. The future of the digital payment sector post-COVID-19 with the staggering number of users and constant innovations certainly seems promising. With continued efforts from the government and private companies, the digital payments sector will achieve unimaginable progress.
Authored by:- -Mr. Nityanand Sharma, Co-Founder & CEO,Simpl
(The views expressed in this article are by -Mr. Nityanand Sharma, Co-Founder & CEO, Simpl. Technuter.com doesn’t own any responsibility for it.)