In the era of globalization, online businesses, and fast-tracked life, digitization has become a mere necessity. Digitization can be considered a significant tool for financial inclusion in numerous countries. Simplification of the procedures, formats, schemes, and resources marks the intention behind the evolution of transactions in India.
The digital transformation of financial transactions has been supported and promoted by the Government of India, especially from the inception of demonetization. The new-age financial decisions and the economic state has been largely influenced by ‘Digital India’, which encourages the population to shift to sources of online payments.
Despite the thrilling transition, the usability and the state of security in online transactions is still debatable in India. The answer to the concerns lies in the efforts of educating users and companies about the goal of this transformation, convenience, reliability, security, and reduced costs.
Present and Future of Online Payments in India
The year 2020 has witnessed a major shift in the transaction volume, where instant payments have been accounted for 15.6 percent and electronic payments as 22.9 percent. Currently, India is holding the top site in real-time payments with around 25.5 billion transactions, which is followed by 15.7 billion transactions of China.
According to ACI Worldwide, by the year 2025, the digitization of transactions in India will reach 71.7 percent, leaving behind the cheques and cash volume at 28.3 percent. The year 2025 in India will also experience a rise in electronic payment and instant payment volume by 34.6 percent and 37.1 percent respectively.
Opportunities offered by Digitization of Transaction
In our country, the path leading to digitized financial infrastructure is being ensured from the collaborative support of banks, government, fintech, and regulatory bodies. The objective behind the transformation marks the aspect of financial inclusion.
Digitizing transaction procedures allow the purpose of responding to the physical barriers and overcoming the costs for the efforts involved in financial inclusion. Digitization also contributes to accomplishing rapid accessibility to the available financial services with your mobile devices, existent access points, and Point of Sales in retail businesses. However, this opportunity needs to be supported by consumer protection support.
Digital payments also ensure the convenience and confidentiality of the users, thereby empowering their state of asset accumulation, economic participation, and ownership. The digitization of transactions in our country has also encouraged numerous entrepreneurial ventures and large businesses such as online retail shopping sites and igaming sites to serve their customers better by ensuring the options for online transactions.
Domestic and international businesses in the igaming industry approaching Indian players specialize in online payment options with the consideration of Indian rupees. The online betting sites in Indian rupees target the rising gaming market of our country by collaborating with service providers such as PhonePe, Google Pay, Paytm, and many more.
Top trends: Digitization of payments in India
QR Code: Disrupting the traditional models, QR is the new-age digital payment technology, which helps in eliminating the usage of Near-field Communication devices or Electronic Data Capture. It enables businesses to offer better security and the convenience of faster payment.
UPI: Third-party financial service providers have built applications based on UPI for responding to the hassle of logging in and delayed transactions. With a convenient and faster two-factor authentication process, users can facilitate a payment.
Cybersecurity: India has experienced financial damage worth 500,000 dollars or more in the last year marking the need for adapting newer technologies for ensuring transaction security of users. Digital payments need to be accompanied by technologies such as AI (Artificial Intelligence), pattern matching, Machine Learning, and biometric authentication for ensuring real-time fraudulent transactions.
Payment Space: The rising demand of ubiquity amongst the users for consolidation of options in payment space. Domination of major players for offering niche solutions will address the concern of usability and security.
To maintain the top position and consistent evolution of the financial infrastructure of India, Government needs to collaborate with financial institutions to create awareness especially amongst the rural population about the system of digital transactions. Security should be the main consideration of the service providers followed by ease of usability and convenience.
Press release by: Indian Clicks, LLC