Changing Digital Payments Landscape In IndiaSep 02,2022
The digital payments space has seen a massive boom over the past few years, growing at a compound annual growth rate (CAGR) of 30 percent. By the...
Worldline’s next feature in the RISE blog series is an insightful discussion on ‘Unpacking The Psyche of Today’s Consumer’ hosted by Dr. Madanmohan Rao (Research Director, YourStory) in conversation with Ramesh Narasimhan (Head, Digital Commerce India, Worldline). The topic discussed was the profound impact of COVID-19 on consumer behaviour and the eCommerce industry.
The pandemic has redefined the consumer’s shopping experience and changed their outlook towards interacting with brands. Users have become increasingly aware about their brand choices - they are prioritising speed, ease, and a seamless experience. According to a McKinsey survey, 75% of the consumers who made purchases online will continue to do so even after normalcy is restored. In such a scenario, user experience can be a key growth driver for brands looking to boost business growth and sales post-pandemic. Let’s take a look at how changing consumer patterns are likely to impact digital payment platforms in the post-pandemic era and beyond.
Businesses across the globe have faced numerous challenges in the wake of the pandemic. This has resulted in businesses of all sizes shifting towards digital payment solutions. Under the constraints imposed by the pandemic, consumers and brands have accepted, innovated, and evolved. The insurance and banking sector has moved to digitalisation to ensure that customers can pay premiums online or get access to online banking. Due to the lockdown, the acceptance of these services has gone through the roof.
Insurance companies belonging to tier-II cities and towns struggle to get renewal premiums from the insured. However, with Worldline’s link-based service LinkPay Payment Solutions, customers can get access to banking facilities with the help of a link that takes them to the payment gateway. This system is much more efficient and ensures that merchants can send reminders of premium payment to the customer who has the option of paying digitally using contactless payment methods.
The use of UPI as a payment method has tripled to 3 billion transactions a month as against 1 billion transactions recorded last year in January, making it a favourable method of payment, especially among micro-businesses, and has led to financial inclusion.
The new wave of technology is democratised. As a digital payment company, Worldline uses artificial intelligence, machine learning for analytics, greater insights for risk management in business, compliance for anti-money laundering, and fraud prevention - technologies that make us stand out from the rest. Besides this, we provide the customers faster refunds, instant payments, quicker settlements, and leverage an omnichannel strategy to ensure that customers get the same experience across all online payment platforms.
A lot of these innovations are incorporated into Worldline’s payment solutions. Apart from this, our payment orchestration layer enables our insurance clients to pay the premiums and buy insurance. This layer takes care of routing multiple actions while the regular payment gateway continues its functioning. This payment orchestration layer helps us in improving customer experience so that payments can become smoother and faster. Another important feature is embedding payments at the checkout while the customer is doing live shopping online to ensure a seamless checkout process. The government and the regulators are committed in our effort to move from high cash to less-cash and a more digital payment-oriented society. Therefore, Worldline brings to the table technologies that is directed towards the further growth of the digital payment scenario.
A few trends can be taken into consideration that occur in eCommerce and fintech industries. One trend is Buy Now, Pay Later. The size of this market is expected to be around 11 billion, but it will probably grow to around 50 billion in the next 5-7 years. This is something that all players are beginning to offer. It is essentially a small credit extension and helps in seamless checkout.
Another key trend is the increase in the usage of EMI. The adoption of EMI has grown from 85% in 2019 to over 150% in smaller towns because they might not have access to buying large ticket home appliances by paying a hefty sum upfront. Therefore, the rate of growth of EMI is exponential in the Indian market.
Similarly, another trend in India that pains the eCommerce industry but has become a widespread practice as a practical consideration is cash on delivery. It is not always viable to manage cash. So, Worldline’s primary aim is to resolve this problem and convert the cash on delivery system to a digital payment process.
The Fintech revolution in India was responsible in making many of the innovations that have become a part of our life today.
“The digital payment chain has a lot of pain points. My advice to all the aspiring entrepreneurs out there is to identify places of fiction and develop vertical-specific solutions. With concrete solutions, you locate a niche that gives you a competitive advantage, add value to it and perfect your business. If you truly are a pioneer, then your business will start generating revenues and earn profits.”
In an environment where the national narrative is based on innovations in the digital payment landscape, three important takeaways can be highlighted from this discussion: Intelligence, Integration, and Inclusion.
Use technology to get intelligence about your customer; integrate this information to build a good profile; and use the customer journey to find out how businesses of various sizes can become more financially inclusive.