Explore The Advent Of Online Payments In India, Triggered By The Demonetization
As we know that information technology has been developed dramatically in last twenty years, so many revolutionary inventions took over the existing technologies. One of them is the online payment methods. Accepting payments from clients or costumers have become essential part of operations of an organization or e-commerce websites. A payment gateway provider offers various kinds of integration to their websites. However, there are traditional methods for domestic as well as international transactions such as cash, cheques and other methods of payments. However, the need for digital payment methods is growing eventually with expansion of e-commerce websites and adoption of such services all over the world.
PayPal Introduced payment gateway services to the world way back in 1998. Digital payment industries and Banking industries all around the world are developing their services for cross platforms which enable every individual to reach all of his needs of payments.
Demonetization triggered growth of digital transactions.
In 2016, Demonetization of currency forced Indian people to go cashless because of less availability of cash in ATM machines and banks. With this move of government, digital transactions have been increased in huge amount. In order to encourage digital transactions in rural and urban areas, Reserve bank of India (RBI) allowed zero-accounts for poor people. This allowed them to make transactions with debit cards. Small business vendors, grocery stores, and shops have started accepting payments from mobile wallets. The simplified payment gateway integration methods enabled the small business and retailers to accept payments from customers all over the world. Highly encrypted- secured payment gateways provide maximum security for every transaction. So many payment gateway providers introduced their mobile applications to major platforms like Android, iOS, and Windows.
Better Payment Methods are developed with the risk of Security threats for sensitive data.
There is always risk of stealing sensitive data such as information of internet banking, Credit/debit cards details in traditional methods of payments and others. But the new era of payment methods ensure the maximum security for each and every transaction. Security for online transactions has been improved with end to end encryption of sensitive information. The 3D security needs a password that is called as a One Time Password, which will be sent to individual’s mobile to successfully complete a transaction.
Scope for enhanced transparency
Every business or organization craves for expansion of their market by providing the facility to pay online. This gives an opportunity to every business to reach new markets. Cashless/digital transactions bring transparency into the system. These transactions can be tracked by banking companies as well as payment gateway providers. Also, these online transactions give an opportunity to keep an automated record and can be analyzed easily when needed. With absence of physical currency, one can pay or accept payments with POS system directly to their bank account. While accepting the digital payments, the currency conversion is automatically done according to current rate of domestic currency.
India introduces UPI (Unified Payments Interface)
The Unified payment interface (UPI) has been developed by National Payments Corporation of India. This system facilitates the transactions between two bank accounts of any bank. The UPI interface is regulated by RBI (Reserve Bank of India). It is available for almost all platforms and can even be accessed by USSD though a mobile phones, which doesn’t have an active internet connection. UPI payment gateway has been integrated to almost all major payment gateways and digital mobile wallets. At present, there are no service charges for UPI transactions. Major banking companies HDFC and SBI have plans to implement service charges on UPI transactions.
Google introduced payment service TEZ into Indian Market.
Tech giant “Google” is well known for introducing new services into market. The company has introduced an app based on UPI into Indian market known as Tez, which has become very popular within few days after its publication on Google Play store.
After launching of UPI based applications such as Phonepe, Tez, Chillr and others on multiple platforms, 17.86 Million transactions were made worth INR 69.47 Billion in the period of 2016-2017. Later an year, there were 737.18 Million transactions took place worth INR 856.59 Billion.
Digital payment methods are reaching heights with booming e-commerce and mobile wallet business.
Amazon introduced “Amazon Pay”, which is a digital wallet service by integrating this service into their existing e-commerce service. In India, digital wallets such as Paytm, Mobikwik, Freecharge offer attractive cashback and other profitable offers to the user when purchases are made in digital mode. This gives costumer a chance to avail the product for cheaper price, and the service provider to get more user attention and new consumers. Digital market places such as Amazon, Flipkart, Snapdeal have integrated digital payment gateway methods to their existing payment methods to sustain in the rapidly evolving digital market. The global digital payments market is estimated to grow at 14% CAGR over the next few years.