- Boost to start ups – Consumption powered by digital payments
The Start-up India programme announced by the Government is certainly a welcome step towards safeguarding and supporting stakeholder interests and concerns. In this context, the digital payments enablers should not be considered in isolation and incentives should be provided across the spectrum. One should remember that the rapid consumption of services offered by start-ups is dependent to a very significant level on the convenience and security proposition offered by the digital payment services. Today, for the first time, we can say that digital money has out piped its counterpart cash and we hope that Union Budget has a positive outlook towards facilitating this further.
- Smart city & Smart payments
India’s efforts towards The Smart City mission is welcome and an immensely positive steps towards growth. While the focus on is on enabling and optimizing infrastructure requirements such as water management, smart grid etc., digital payments too should find a mention and consideration in the Smart City ecosystem as these will further help in optimizing the resources spent on cash management, logistics to name few. Municipal tax collection, Traffic fines, utility payments, transfer of subsidies, etc. are just some of the examples where digital payments should be made mandatory to check leakages and thereby cities to provide better facilities for its residents. The Union Budget should provide the push for enhanced penetration of digital payments in the smart city landscape.
- Increasing payment acceptance network in India
The new-age digital payments are not merely based on the proposition of convenience; financial inclusion too can be made possible by embracing digital payments in a big way. The upcoming Union Budget presents an ideal opportunity to step up the movement towards this and we hope a provision will be made to incentivize the adoption and usage of digital payments by banks and consumer alike. Today we convert approx Rs. 2,15,000 crores of digital money into cash by ATM withdrawals. This is the immediate potential at hand for anybody to increase the acceptance network of both Person to Person and Person to Merchant payments.
- Jan Dhan Yogna
It is ironical that while India rapidly surges to emerge as an economic superpower, financial inclusion sill remains a distant dream. The Jan Dhan Yojna augurs well for overcoming this mammoth challenge. However, relying merely on the conventional sources of banking will limit India’s success on this front. Today our debit cards are primarily used as ATM withdrawal cards just to give some figures in perspective. Withdrawals through ATM cards exceed Rs. 2,15,000 crores every month as against Rs. 15,000 crores at POS which constitutes to only 6% of the debit card usage. We hope the upcoming Union Budget enhances the overall business proposition for the new-age banking services enablers such as payment gateway service providers by way of incentives for Person to Person payments and tax incentives or rebates on its R&D costs.
- Digital Banking, Peer to Peer, Peer to Merchants Transfer via smartphones
We hope the upcoming Union Budget carries forward the impetus offered to the adoption of smartphones by making it more affordable. Today our debit cards are primarily used as ATM withdrawal cards just to give some figures in perspective. Withdrawals through ATM cards exceed Rs. 2,15,000 crores every month as against Rs. 15,000 crores at POS which constitutes to only 6% of the debit card usage. This is much required as it will trigger the digital banking ecosystem in general and peer-to-peer payments in particular. The new-age mobile payments will thus be able to penetrate even to the remotest of areas in the country enabling financial inclusion.
- Bharat Bill Payment Operating Units (BBPOUS) – Aggregation of bill payment – Increased push to online payment collection and reduction of cash
Digital Payments can help India plug-in the ‘loose’ economic leakages which are detrimental to the apparent interest of the country’s economy. Utility companies and Government agencies have to incur a heavy financial loss every year due to such lose ends in payment recovery. However, with the advent of the Bharat Bill Payment Operating Units (BBPOUS), the collection of payments can be streamlined as well as made foolproof and hence due incentives should be provided to drive citizen-interest towards BBPOUS. Incentivising and increasing consumer usage on BBPOUS will be as important as creating and facilitating this platform.
- Digital Payments have overtaken cash payments and this gap will now increase multifold adding to the GDP growth rate
It may surprise a few, but we have witnessed for the first time digital payments almost matching the cash transactions. For November, a total of 99.82 million electronic transactions took place as compared to 81.37 million paper-based settlements. This has been a consistent trend as per the Reserve Bank of India. This can work wonders for India’s economy as the digital payments ecosystem makes each and every rupee count unlike cash ecosystem where a lot of unaccounted wealth remains outside the purview of the country’s economy. For long-term gains, we hope that in the upcoming budget, impetus should be provided to adopt an increasingly cashless ecosystem.
- Combating financial cybercrime
While India has embraced the new-age digital payments in a fairly decent pace particularly in the urban areas, the future potential of the services will depend a lot on the user-experience and assurance from a non-fraudulent perspective. The alarming rate of breaches and the increased vulnerability brought about by few players eager to score on the convenience front while over sighting the authentication process, calls for immediate attention. Authentication built over marketing proposition rather than security concerns is a cause for concern and the Union Budget should formulate a stringent process for players to adopt a long term approach rather a short-sighted strategy on attracting consumers.