Key Digital Payment Trends in 2021

The global pandemic, COVID-19, has led to increased acceptance of digital payments throughout the world including India. Through these difficult times, eCommerce industries have fared well as consumers progressively transitioned to cashless and contactless payments given the many options they had to choose from.

According to a Research and Markets report, the Indian digital payment industry currently stands at INR 2,153 trillion and will grow at a CAGR of 27% to reach INR 7,092 trillion by 2025. A report from The Economic Times mentioned that the recent Union Budget announced a fund allocation of INR 1,500 crore to boost digital payments. This move comes after the Reserve Bank of India announced that it will build a corpus of INR 345 crore to promote ePayment in rural India. Not only this, but other exciting trends in the digital space are playing their part to boost the ePayment industry in India.

Rise of Pay Later: Buy Now, Pay Later (BNPL) - this financial buzzword has redefined how and when to pay, providing flexibility and convenience. More people are embracing the concept of BNPL as it involves instant credit and a faster checkout option. This facility allows customers to turn their purchases into EMIs, thus making payments affordable. A 2021 Global Payments Report highlighted that BNPL will become the fastest-growing ePayment method in India, projected to grab a market share of 9% by 2024.

Contactless Mobile Payments: Mobile phones have been brought into the digital payments fold, thanks to the point-of-sale (POS) transaction option. The tap-to-phone option will allow micro and small businesses to enter the digital economy with just an app available on smartphones. This will also include the elimination of signatures and physical receipts, eventually leading to shorter approval times.

Facilitating Omnichannel Commerce: Internet and mobile devices have revolutionised the retail sector. As consumer embraces new technologies and moving towards digital payments, the retail sector must adapt themselves to explore new ways of reaching their consumers. By integrating all their channels, the retail store needs to facilitate holistic omnichannel commerce with the integration of a comprehensive payments platform. It consolidates all the business payment processes by giving a single view of all customer interactions and providing a seamless shopping experience across all channels.

Virtual and Sound-Based Payment Experience: Time is of the essence. So, without the consumer having to wait for a plausible option of payment, the payment method has been moved right up, to the moment they need it. This is available through smart devices, wearables, voice commands, virtual reality environments and sound-based alternatives. An Economic Times report dated March 2019 stated that 668.3 million users were projected to rely on soundwave technology by 2021. Realising their potential, a few companies in India have brought about a dynamic change in payments through soundwaves, without the use of the internet.

In Conclusion

While India’s digital economy is growing rapidly, and the payment trends are replete with exciting possibilities. These new changes are here to stay, through 2021, and will continue to redefine the ‘new normal’ for merchants and consumers.