Digital payments in India are touted to be the next big thing for the Financial Technology industry in 2019. The death of cash has been a much-talked-about trend for many years now. Accepting digital payments is indeed the next-generation. While there is still a significant divergence in opinion about digital payments, the use of cash is declining in many markets.
Think about it this way, you go to a retail store, do some shopping. At the time of payment, the shopkeeper says, we accept only cash. What would your obvious reaction be? Annoyed. Right? You would either go hunting for an ATM or just leave all the items you picked. You would rather decide on going to a store that accepts digital payments. Similarly, if you haven’t yet moved to digital payments, your customers may possibly feel the same. Sure, as a store owner, you need running cash. But, at what cost? Your customer? No, right? Customers these days are tech-savvy and demanding. They prefer making digital payments via cards or mobile phones over traditional payment methods.
Growing Trends in Digital Transactions
The payment market in India is enormous. With the increase of robust mobile payment gateways and the conception of e-commerce in the country, India’s cashless economy has indeed accelerated in the past few years. Some private players like FreeCharge, Paytm, MobiKwik and PayUMoney have emerged. They have played a key role in growing the overall market. The Government of India with an attempt to transform India into a digital economy is taking extraordinary measures to boost digital payments. RBI and Indian Banks Association together have initiated The National Payments Corporation of India (NPCI). NPCI has then launched the Unified Payments Interface (UPI). According to a study released by ACI Worldwide and AGS Transact Technologies in March 2018, four out of five transactions possibly are done digitally in India by that year.
Cashless transactions in India have grown at a fast clip and are expected to reach US$ 1 trillion annually by 2025; providing immense benefits for the economy. (Source)
Digital Payments are Empowering the Small Merchants
Despite the advantages of digital payment, small and micro business across India prefer cash payment at the moment. Basically, many micro-merchants find it difficult or expensive to open a current account to accept electronic payments. However, many payment processing companies have removed the friction involved. They have provided a solution for a smart and easy digital transaction. All a merchant needs is a smartphone and a mPOS card reader. Using a smartphone, to accept credit cards, debit cards, wallets, UPI, and online payments. The money will be credited into the merchant’s savings account the next business day.
Give Customers the Payment Options They Want
Well, regardless of what may be the situation, it will be the customer who drives the adoption of different methods of digital payment options, not the merchant. Digital payment is an umbrella encapsulating a range of multiple payment modes in different ways. Be it mobile wallets, internet banking, POS, Bharat QR to name a few. It is essential to understand that customers value choice when it comes to payment modes. In any situation, they want the most convenient payment method. With the advancement in technology and easy access to the Internet on mobile phones, various new payment methods like Whatsapp & Facebook pay, Google Pay (Tez), Phone Pe, etc. have come up in the market. It is has become essential for the merchants to embrace this and provide choice to their buyers.
Digital Payments Customer Base to Increase to 300M by 2020
When we think of digital payments, people are going to increasingly engage in only two types of transactions – payments made against any purchase and money transfer to a friend or someone they know.
The ‘Digital Payments 2020‘ report, which was collectively published by Boston Consulting Group and Google, projected that the digital payments in India will see transactions worth USD 500 Billion by 2020. Digital payments would contribute around 15% to the country’s GDP. Based on the report, 50% of the internet users by 202 would make digital payments which would increase the customer base from 60-80 million to 300 million.
Digital Payments have become an All-Encompassing Paradigm Shift
According to the ETBrand report, the government is working on a proposal to incentivise digital transactions by providing cashback to businesses and price benefits to consumers.
The government’s support for digital payments has drawn the interest of more people, and the Indian payment space is getting crowded with players. The apparent holy grail of digital payments is enabling hassle-free, fast and secure payments for everyone, everywhere in the digital or physical world. After experiencing the digital payment perks, what else the customers would like to opt for?
So, the business owners need to ramp up and provide more new payment platform and tools at their store, as accepting payments will continue to evolve at a rapid pace. Adding to its high-level security and customer support will put merchants on the road to success.
Digital Payments have Made Transactions Hassle-Free
In comparison to the traditional way of accepting payments, merchants can now embrace digital payments at their store with much ease and simplicity.
This not only broadens their customer base but also contribute to the Indian economy.
Card Payments via Swiping Machine
Gone are the days when cash was the only payment mode. Today customers want to make quick and hassle-free payments. Being a store owner, you can tap these customers and accept all card payments (both contact & contactless). With the card swiping device called as POS (Point of Sale) device, you can swipe your customer’s card and accept payment. Also, you can connect your existing phone to a mPOS device or directly download an app and start taking digital payment.
Some customers want to make payment through their net banking app or website using their smartphone. You can use your POS or mPOS device (Mobile POS) to accept such payments too.
Digital wallet adoption continues to grow incrementally. With the robust growth in smartphone usage, E-Wallet payments like PayTm, Mobikwik, Freecharge have become a comprehensive way of making payments. Customers carry their phones everywhere. Doing a payment using digital wallets have become the most and convenient option. By offering a digital wallet payment option, you are giving them the comfort to select one of them and pay.
It lets you accept digital payments from your customer over the counter. You can use his Aadhaar number and biometric authentication. But you need to be associated with any acquiring bank live on BHIM Aadhaar Pay. Without sharing any account details, customers can pay using their Aadhaar Card and biometric verification.
Pay at Home
To address all the needs of your customer and give them the best service, you can also accept payments from their home. You can send your POS device or a payment link from which your customers can make cash from their comfort.
QR Codes are Everywhere
With the launch of new scan and pay methods like UPI, Bharat QR, you can accept payments by displaying a QR code at your counter, which your customers can scan and pay instantly. The customers don’t need to share any of their account or personal details, just by browsing through their phone app, they can pay immediately. Payment goes straight from the customer’s account into the merchant’s account. Both the parties get real-time notiﬁcation immediately.
Swapna Rao is an engineer who turned an SEO content writer. She specializes in sharing simple, easy-to-implement SEO tips based off of her years of experience.
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