Transformations and Trends Reshaping Payments in India

Digital payments have existed for quite some time, but the landscape has undergone a rapid transformation at an astronomical rate. The pandemic has profoundly touched every aspect of our life, but at the same time infused technology-based solutions. Among the most impacting is the digital payment encouraging cashless economic model. As a result, digital payments have grown by 76% within a year from the imposition of the lockdown. So let us first decipher what triggered the phenomenal upsurge.

Factors Reshaping Indian Digital Payment Landscape

1. Amplified acceptance:

India’s digital payments market received a boost post-demonetization in 2016. As a result, several technology innovations helped wider acceptance shifting from the cash-intensive ecosystem. Added awareness was further accentuated by initiatives by UPI and the introduction of QR-based payments. In addition, Zaakpay’s India payment gateway provided all the emerging payment methods for an enhanced customer experience.

2. Technology innovations:

Improved technology emerged in the interim to bolster further growth. The immediate impact is a higher return on investment for embracing secure and scalable innovations.

3. Increased eCommerce platforms:

The eCommerce marketplace took off amidst the pandemic restrictions, with more and more households relying on purchases from the eCommerce platforms to satisfy their daily needs. Thus, India payment gateway integrated seamless checkouts ensured sustained digital payment growth.

4. Robust cybersecurity:

Growing technology dependence engenders tighter regulations and cybersecurity protocols. As a result, the digital payment growth prompted a greater focus on tightening security to thwart cyber attacks and ensure data integrity.

Added to all these factors is the customer’s thumbs-up to the digital payment ecosystem introducing options like the Buy-Now-Pay-Later (BNPL). It indicates that customers are not averse to grabbing efficient and convenient digital payment methods that help maintain COVID-19’s safety protocols.

Transformation Reshaping Indian Digital Payment Landscape

The shift in the Indian financial services space is tectonic, to say the least, as the financial institutions have been pushed back from the traditional payments economy. Today, the digital transformation in the digital payment ecosystem allows you to transact seamlessly, riding the trifecta of innovative technology, supportive regulations, and finally, customer-driven demand.

  1. Innovative Technology: The primary platform allows the consumer to make seamless online peer-to-peer (P2P) and peer-to-merchant (P2M) transactions.
  2. Supportive Regulations: The regulatory norms are formulated by the RBI in tandem with the increasingly expanding open banking network. It allows other financial services and innovative digital payments in a conducive environment.
  3. Customer Demand: Today’s consumers express their preferences emphatically. And the overwhelming choice is a personalized and efficient, transparent payment experience in relative safety.

The COVID-19 induced shift in the Indian digital payment transformation is revealing. The following exemplifies the surge in transformation in the digital payments era, supported by an integrated payment gateway from creative service providers like Zaakpay.

  • According to an international financial technology provider, India’s real-time 5 billion payment transactions are ahead of China’s 15.7 billion in 2020.
  • The same report also states that India’s payment volume during the same period stood at 6% and 22.9% in instant payments and other digital payments, respectively, compared to 61.4% for paper-based transactions.

That brings us to the crux of the critical transformations in reshaping India’s digital payment landscape.

  • Inclusive Payment Ecosystem:

The payment industry’s innovation has been partially consumer-driven. Smartphone penetration with affordable data plans and user-friendly digital interface in the payments ecosystem has contributed to consumer confidence. In addition, UPI has emerged as the preferred payment application. Moreover, e-wallets are convenient payment options replicating all the features of a physical wallet. Therefore, digitalization is the growth catalyst driving online payments in several sectors.

  • Technology Enablers:

Technology is a catalytic driver in the payment landscape’s digital transformation. Thus, businesses are always looking for digital tools to help build solutions to deliver an enhanced customer experience. Therefore, a brief detour through the tools is educational.

Application Programming Interface (API): A software intermediary allows two disparate apps to interact and deliver a seamless customer experience.

Machine Learning (ML): The reams of data stored under merchant services integrated with the payment gateway are open for analysis to gain valuable insights.

Cloud-Based Computing: Enterprises leverage their potential for enhanced agility. In addition, it helps meet the customer’s changing demands in their fast-paced modern lifestyle.

Digital Ledger Technology: You can increase the processing speed manifold using Blockchain technology, essentially a DLT. In addition, it impacts cross-border payments significantly.

Trends Reshaping Indian Digital Payment Landscape

The shopping experience during the COVID-19 pandemic turned into a frenzy after tech-enabled payment methods flooded the digital payment ecosystem. Thus, you can choose between the already existing cards or Net Banking and wallets, UPI, QR, and NFC, which became mainstream overnight. So let us learn about them a bit more.

  • Digital Wallets: They ape the physical in every respect, minus the physical cash. The balances are replenished using the stored resource information allowing a seamless payment experience. With added functionalities by the day, they will continue to dominate.
  • Mobile Payments: Mobile devices have revolutionized how you pay for purchases and services. The fantastic flexibility allows payments through cards, wallets, UPI, QR codes, and net banking, to name a few. In addition, SIM-based applications will get feature phones on the digital payment horizon.
  • NFC and EMV Payments: They are the backbone of contactless payment technology, driving consumer preferences while mitigating health concerns. Both the methods are expected to make further inroads in the digital payments ecosystem.
  • Unified Commerce: The concept combines multiple facades, including eCommerce, m-commerce, POS, CRM, and inventory management, creating an omnichannel. It is slated to be the next significant innovation in the digital payment space, raising customer experience to the next level.
  • Banking Apps: The vast banking customer base enjoyed all the banking services via various digital solutions during the pandemic. In addition, consumer preferences and market demands drive its evolution.

Rounding Off

Thankfully, transformation and trends reshaping India’s digital payment landscape are not confined to B2C but also B2B, responding nimbly to digital payments solutions. As the ecosystem evolves, Zaakpay incorporates added functionalities in its service range to bring in an array of upsides for the owners. The ecosystem is poised for faster processing and superior security features in personalized payment gateways to scale up financial services.

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