India is embracing the mode of digital payment at a rapid pace. After the demonetization wave took over, a majority of customers and vendors were forced to opt digital payment methods. What started as forced adoption has become a pleasant necessity now. Let’s take a look at some of the trends that are shaping this digital revolution.
The line between payment and commerce are blurring
Payment services for small and medium-sized merchants (SMEs) are increasingly being integrated with other business software and POS systems, making merchant payments the epicentre of the ongoing disruption. Payments are increasingly becoming an integrated part of the commerce journey with the payments value chain becoming digitized. In a bid to remain competitive, banks in India are launching digital wallets. SBI launched State Bank Buddy mobile wallet in August 2015 and 4.8 million transactions valued at USD $35.1 million (INR 2.3 billion) had been made as of March 2016. Other digital wallets include Pockets (ICICI Bank), Lime (Axis Bank) and service providers including Paytm, Oxigen wallet and FreeCharge.
From customer experience to customer engagement
With banks understanding that digital channels are the way in which customers interact with them, digital investment priorities are starting to shift from customer experience to customer engagement. Developing digital channels as customer engagement platforms is now seen as critical to the success of banks rather than focusing only on enhancing customer experience. Following the need of the hour, DBS bank launched Digibank, India’s first mobile-only bank. It offers an unlimited number of cash withdrawals along with cashback and discounts on in-store and online purchases. An account can be opened at any of the bank’s partner outlets simply by giving Aadhaar Card details and biometrics for authentication.
It is safe to say the future of payments in India will see continued growth in alternative options. It can also be concluded that mobile will become the primary interaction channel in the future.