For digital payments, the battle isn't for space but to get merchants online

Technology is a great enabler. Ask any founder in India’s burgeoning startup ecosystem and they would agree that without technology and innovation, their company would probably not exist. Interestingly, several traditional and legacy companies may also say the same today.

When it comes to the financial sector, technology has made possible functions that would have been unimaginable a decade ago. Like tapping your credit card to pay for your groceries. Or scanning a code to pay your cab fare.

Deliberating on what the future holds for digital payments in India, Sajith Sivanandan, MD & Business Head – Google Pay & Next Billion User Initiative, Google India, and T.R. Ramachandran, Group Country Manager – India & South Asia, VISA, said the primary requirement was to make payments seamless.

They were speaking as part of a panel discussion at the ET India Inc Boardroom presented by TXN NXT powered by NPCI, which brought together industry leaders, policy makers and economists to discuss and deliberate key sectors of the economy. Over the five-day conclave, experts uncovered trends and challenges in the BFSI, Retail, Manufacturing and MSMEs sectors, as well as the economy as a whole.

“We must be accessible, be everywhere, have a sharp customer focus, and must deliver on every promise,” said Sajith, enumerating the cornerstones of his business. He said a majority of his customers were outside the top seven cities in India, and hence it was imperative for him to have a large footprint, focus on localization, offer customers reliability and be proactive in fighting fraud. “Payments is now Bharat,” he said.

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Adding to Sajith’s comment, Ramachandran said it was important for players to make payments ubiquitous, seamless and secure.

T.R. Ramachandran & Sajith SivanandanAgencies

Left – T.R. Ramachandran, Group Country Manager – India & South Asia, VISA and Right – Sajith Sivanandan, MD & Business Head – Google Pay & Next Billion User Initiative, Google India

While demonetisation might have led to a jump in digital payments, the cash economy is back again, primarily because of the ease of use. India is a cash-dependent country because “cash is the easiest form of payment”, he said and added digital payments must offer that ease for faster adoption. “Only 15% of India is digitized in the personal consumption expenditure space,” he said, adding that there is a huge growth opportunity in the payments space for the country.

It is critical that all merchants are onboarded for online payments, and only then will there be pan-India adoption of digital payments, said Sajith. Between various players in the digital payments space, there should not be a battle for space, but to get merchants online, he added.

While the government has been keen on digital payments, the Reserve Bank of India recently set up a Payments Infrastructure Development Fund “to encourage acquirers to deploy Points of Sale (PoS) infrastructure (both physical and digital modes) in Tier-3 to Tier-6 centres and north eastern states,” the central bank said on its website.

Both Sajith and Ramachandran said this is a very positive move as it will encourage further investments in the sector, and bring more democratisation to digital payments.

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Put payments and digital together, and the first thing that comes to mind is cyber security.

Ramachandran said digital payments in India were still at a nascent stage and there was always the chance of fraud, be it from the customer or the merchant side. “Fraudsters today are no longer sitting in garages and looking to make a quick buck,” he said. Large, specialized organisations, and in some cases even nation states, were behind economic frauds. There needs to be transparency with customers, and tokenization of data will go a long way in making customers’ details safe and secure.

Sajith said using technologies such as Artificial Intelligence and Machine Learning can have many benefits when it comes to identifying patterns and fraud, but it has to be a continuous, dynamic exercise. “Fraud vectors keep changing, and it is critical that users are aware of what not to share.”



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