For payments to take a progressive shape, seismic changes to digital transfers and creating unbounded opportunities for innovation are the need of the hour. Many businesses have changed their business models to include digital payment options in an effort to give customers quicker, easier, and safer interactions at lower costs. It won’t be wrong to say that innovation in payments is crucial in a world where cash is no longer the king.
With digital payment transactions experiencing a surge, payment innovations are seeing an uprise amidst the fierce competition in the market. In order to fight for market share, businesses are focusing a lot on innovation and launching disruptive products in the market. As we shift from cash to contactless payments, competitive digital payment methods are gaining momentum. Banks and digital payment enablers are developing a range of alliances to gain access to capabilities, enhance their value offering and expand their reach. For example, with the help of APIs, it is now possible to create partnerships, enhance services—particularly quicker payments—and unbundle services more easily. There is no need for banks to start from scratch. They can simply plug in the APIs that are provided by new-age companies and take a new feature live. This saves a lot of time and effort.
Most people now prefer to pay digitally because of the benefits of convenience and speed. Also, digital payments have been able to win the trust of millions.. s. Although digital payments are scaling rapidly, companies are conscious of the major security concerns with the rising cases of scams and frauds across digital payment platforms, and are putting the required processes in place to minimise risk to both themselves and their customers. This may allow them to take advantage of digital payments while ensuring the longevity of their customer connections.
Sadly, payment innovation has proven to be a very lucrative chance for many malicious actors to hack into unprepared online businesses and steal customer data for their own financial gain. As a consequence, there has been an increase in such incidents in recent years. New and continuing security standards must be taken into account by all participants in this sector. Building on a dependable and tested security system is essential given the serious repercussions of security leaks.
Digital payments are our future
Digital payments saw a huge uptake post demonetization in November 2016, and have been on an upward path ever since. As per IBEF2 in 2019, India had a more evolved digital ecosystem than several developed countries in the world. With a higher dependency on online platforms amongst Indians, 2020 witnessed a rapid increase in adoption of digital payments. The pandemic acted as a huge accelerator for the digital payments industry as millions preferred to use digital payment modes vs cash, to safeguard their health. As per a recent report by Accenture3, in India, 66.6 billion transactions worth US$ 270.7 billion are expected to shift from cash to cards and digital payments by 2023 – and further increase to US$ 856.6 billion by 2030.
While this may sound like good news, digital payments require two key enablers - innovation and infrastructure. Although India has made commendable progress in terms of innovative payment solutions, there is still work to be done when it comes to digital infrastructure. Recent data from Ookla's Speedtest Global Index4 in August 2023 positioned India at the 47th spot for mobile internet, indicating a substantial improvement in internet speeds since the introduction of 5G. This enhanced connectivity lays a stronger foundation for digital transactions, reducing the hindrances posed by inadequate internet speeds.
Innovation within the digital payments sector has rapidly evolved, with a proliferation of inventive products that have resonated with customers. To sustain this growth trajectory and ensure the continued success of digital payments, India must focus on fortifying its digital infrastructure while pursuing ongoing innovation to deliver advanced, yet straightforward and secure, solutions for its consumers.
Enable your business with everything digital
At BharatPe, our teams are committed to continuously innovate and offer fintech products that help merchants grow their business. We were the first to launch interoperable UPI QR in 2018 that enabled our merchant partners to accept payments from any of the numerous mobile wallets like Paytm, PhonePe, Google Pay, BHIM and 150+ other UPI apps, without any transaction fees. In 2020, we launched our card acceptance machine with the industry-first zero rental and zero transaction fees option. In November 2020, we toppled Google Pay to become No. 3 player in the country in the UPI P2M category. Today, we have a network of over 10 million merchants across 400+ cities in the country. It is our continuous endeavour to transform the way SMEs view payments and empower them.
With digital payment adoption accelerating in COVID-19 era amongst consumers and merchants, it is likely that the shift in the way people transact will be a sustained one. The pandemic has also unearthed opportunities for SMEs and MSMEs which are both agile and versatile to change and has compelled one to rethink their payment framework and infrastructure.