पत्रिका जगत Positive Journalism
How payments industry fared in 2018 and outlook for 2019
The Indian economy has traditionally been dominated by cash, where 95% of the consumers pay via cash or cheque. However, increasing internet penetration coupled with rising availability of smartphones have led many Indian consumers to shift to digital payment modes such as paying for goods and services through any electronic medium.
GDP growth, private consumption and government initiatives have resulted in strong growth in the payments sector. The number of transactions has grown from 7,699 million in financial year 2012 to 26,370 million in financial year 2018. The value of transactions has grown from ₹ 1,621,130 billion in financial year 2012 to ₹ 2,871,583 billion in financial year 2018.
The Government of India has been planning initiatives for educating and spreading awareness regarding digital payment modes to the sub-urban and rural population.
Factors like PMJDY, Aadhaar enabled Payment System (AePS), rising smartphone penetration, and more recently demonetisation have created favorable conditions for wider adoption of digital payment systems in India. Technological advancements in the Indian digital payment services ecosystem are providing fast transfers, convenience and faster check-out options to Indian consumers. UPI was further augmented with the introduction of Bharat Interface for Money (BHIM) application which has enabled high volume cashless payments through smartphones.
Outlook
Innovation within payments and integration on Banking & Fintech will continue to drive the year 2019. We have already witnessed disruptions like UPI 2.0 in 2018. This trend should get amplified in the year 2019. Increase in merchant acceptance points in addition to merchant education and awareness about the relevant form-factors of payment will play an important role in determining its success.
Multiple factors and behavioral trends such as increasing internet and smartphone penetration seem to be powering India‘s transition towards a cashless economy. One of the key requirements for long-term growth and a faster adoption of Fintech solutions at last-mile touch points is the customers’ trust on digital payment modes. The Indian Government‘s support of digital and online payments is making the space affordable and interoperable which is further expected to benefit both end-users and businesses on a large scale.
Increased penetration of debit and credit cards, the growing e-commerce sector, rising disposable income coupled with the government‘s initiative towards promoting a cashless economy will provide a beneficial opportunity for growth of PoS devices in India. It is projected that the retail sector will account for the highest volume share due to the increasing awareness amongst retailers about the benefits of PoS terminals. However, issues like privacy, security, trust and lack of integration of telecom infrastructure may pose hurdles for the industry.
