Digital India In Year 2020?
The payments industry has witnessed a monumental revolution in the last decade.
Digital India In Year 2020?
The payments industry has witnessed a monumental revolution in the last decade. There have been remarkable innovations and initiatives that have changed the way India transacts. For instance, Government’s push towards digital payments with initiatives like FASTags, the introduction of interoperability on wallets, cash recyclers, or innovations by FinTech players like RFID based fuelling apps, all-in-one QR code for merchants and UPI QR-based cash withdrawals on ATMs; digital India clearly holds an extremely promising future.
Gravitation Towards an App-based Economy
The culture of apps that gained momentum in the last couple of years is expected to soar higher in this decade. Indians are bingeing on apps for everything ranging from healthcare to grocery and even fuel management recently. For instance, there is an app that lets users pre-pay for fuel from the comfort of their homes and even get it delivered at their doorstep.
According to a recent report by analytics firm AppAnnie, India is the second-largest market worldwide for app downloads. With 19 billion app downloads in 2019.However, it will be interesting to see the rise of a super-app which integrates all your must-haves into one, therefore, decluttering the limited screen-space of your beloved smartphone.
A surge in prepaid/gifting cards
A surge in prepaid/gifting cards
India saw increased usage of Virtual cards over plastic in the past two years; this trend has aided in doing away with the brick-and-mortar stores, thereby, encouraging more digital platforms.
Factors like convenience, longer shelf-life, and instant gratifications have led many, including the popular meal vouchers, to evolve from physical coupons to meal cards (physical & virtual) in recent times, sometimes even with the facility to top-up.
With growing competition and a better standard of living, prepaid/gift cards are here to stay albeit with newer features.
National Common Mobility Card (NCMC)
NCMC first drew attention in 2016 when the most awaited Automatic Fare Collection System (AFC) was introduced with Kochi Metro. In 2019, the Government of India introduced its first-ever indigenously developed payment platform: One Nation, One Card, to facilitate seamless travel through different metros and other transport systems.
Like Bank issued card/debit cards, it is a single card that can be used for payments across all segments including metro, bus, suburban railways, toll, parking, smart city and retail in addition to using ATM facilities.
Smarter Commute:
Implementation of NCMC, automatic toll collection with FASTag at National Highways, pre-paid fuelling with Fastlane across fuel outlets and the wide acceptance of QR tickets at metro stations, are examples of digital India fostering smart commute.
In fact, FASTags are also being tested for facilitating fuel and parking fee payments.
Further, there is a recommendation by CDDP that all new metro and transit payments should be made interoperable through NCMC.
Acceptance of frictionless payments:
To ensure frictionless payments, the industry currently has both – innovations as well as upgrades. For example, the traditional PoS machine has evolved into an android version that provides ease of payment and makes it more secure.
Furthermore, RBI mandated tokenization of cards (currently only applicable on credit cards), may provide a much-needed boost to the virtual card (open-loop) segment, thus, bringing in the second wave of digitization.
Note: Full version of the article first appeared in Financial Express