What are the Key Digital Payment Trends in India ?

In the Indian payment eco-system, consumer behavior is being shaped by government policies and regulatory changes, tech changes and changing business models, all of which are reshaping the competitive landscape. JAM – Jan Dhan, Aadhar, Mobile. For the first time a financial inclusion program is talking about credit and insurance compulsorily. Saving Account is merely a way to reach the customer. This is also a sign of convergence.

P2P payment draft guidelines show the regulator’s willingness to reduce uncertainty. Both government and regulator have realized that driving competition is the key to achieve mass inclusion and less cash. Limited number of players cannot deliver on such a huge untapped opportunity across the BFSI segment.

Changing business model and competitive landscape (1) In BFSI you may not need to be the largest manufacturer (2) Digital only bank – your competition may not be in the same industry. You don’t need to be an insurance company to compete with other insurance companies or any other specific peer of the same industry. India is not a winner takes all market – wide choice of payments and remittance products. It is a multi-form factor market and one can have an omni-channel approach (high numbers of touch points: 75,000 ICW outlets, 200K+ daily customers, 2500 distributors, 40 mn customers). Leveraging the touch points with the customers – international remittances, credit and loans and insurance/investments

Big Bang on Technology – (1) Social media will eventually lead to social commerce. (2) Open APIs – banks are also opening up to this. UPI – very innovative and can be a game changer. (3) Transaction data will power analytics and relevant service in real time to relevant consumers. (4) Blockchain – will open up the transaction trail introducing real time supervision and relaxation on overall other operational compliances. (5) The cost of many of these tech changes will be consumer privacy.

With UPI and RuPay, the eco-system will only grow bigger giving various financial means for the Indian consumer to transact and stop relying on the good old currency notes for business and commerce.

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