Last we checked, online transactions in India exceeded $1.1 Billion! Digitals payments will cross a trillion dollars by 2020. Why is there a surge in online payments in India? Some are obvious, some aren’t.
The Demonetisation Effect
Isn’t that the first thing that comes to mind?
Digital payments in India have witnessed an unprecedented surge since the government’s decision to ban all Rs.1000 and Rs.500 notes in the country in November 2016. The move was the first official thrust towards a ‘Digital India’.
Although a little reluctantly, the digitization move saw mom-and-pop stores and individual service providers embracing technology – and the ease of transacting and the new business prospects that it brings.
In simple terms, online payment involves modes like:
- debit/credit cards
- internet/mobile banking
- bank prepaid cards
- Point-of-Sale (PoS) machines
- mobile wallets
- digital payment apps
- Unified Payments Interface (UPI) etc.
In the past, it took a great effort for a service provider to set up a payment gateway. It called for a great deal of paperwork, time-consuming approvals, technical know-how, and of course, significant transaction costs.
As a customer, making payments required one to set up beneficiary details, verify account numbers, branch details, IFSC code, etc. Even then it could take over 48 hours before one could actually make the transaction.
Today, with a smartphone in pretty much everybody’s hands, easy digital transactions are essentially at everyone’s fingertips.
There are several payment solution providers like Instamojo that can help you get started with just a smartphone and a bank account! With instant on-boarding, a few simple steps can get your products market-ready in minutes. There are no setup or maintenance costs, and transaction costs are minimal.
Additionally, you also get a complementary online store for your business, which saves your business the hassle of setting up a website. Constant user-friendly security upgrades are an added bonus.
Speed + Adaptability
Most transactions take less than a minute today and online services are available to attend to customers 24×7. The sheer speed of online payments has got Indians to switch to online modes for business and personal payments!
Different payment modes offer attractive cashback offers, discounts, and complimentary vouchers for payments processed through their channel. This acts as a major push to go cashless and offers the service provider an opportunity to introduce other products to the target audience.
The other benefit of online payments is that no matter how small the transaction, there is a record of it. Every transaction can be tracked. Unlike with cash transactions, an individual can specifically track expenses under each head and systematize a better individual budget.
From a regulatory point of view, digital transactions bring a lot more transparency to the economy. It helps eliminate illegal transactions through a parallel economy and the circulation of counterfeit notes in the long run.