There has been a lot written about a new standard for digital payments simply because of the Covid pandemic. The new standard is a basic reference to ‘contactless’ payments exactly where prospects do not have to hand more than their payment instrument (telephone or NFC card) to the merchant. The reality although is that the trend has been a extended time in the generating and will only accelerate from right here on.
True, the coronavirus has negatively impacted in-shop payments but this is only short-term and will probably bounce back as the dust settles – this trend is becoming noticed worldwide as lockdown situations loosen up. That mentioned, it is clear what will drive digital payments:
1. E-commerce – This is a no-brainer. The trend towards e-commerce has been on because quite a few years simply because of the sheer comfort of buying from dwelling as properly as the enhanced logistics of delivering things inside hours of ordering or inside a day to two. This enhanced quick gratification only suggests that this vertical will continue to rise and if any person has any doubts on this, they only will need to see the current financials of firms in this space. Since this space is fundamentally aligned to digital payments of all sorts, there is a constructive correlation involving the rise of e-commerce and digital payments.
2. Government and regulation – This is essential to positively drive digital payments. This space is a higher profile 1 and will generally have some quantity of regulations in spot and maybe rightfully so. Regulations, as is properly identified, will need to be calibrated so that there is a balance involving the rewards accruing to prospects and enabling firms to develop in the space. Beyond that, governments pushing the adoption of digital payments will offer that further fillip.
However, like regulators, governments also will need to strike a balance to make sure that incumbents in the business as properly as newcomers have incentive to remain or enter and innovate. Given the low transaction fees of digital payments as properly as enhanced tax revenues, it is in the interest of governments to do so.
3. User encounter/delight – The ultimate user encounter right here is two-fold 1, supplying a excellent user encounter to the merchant and two, delight to the purchaser. In each instances, it boils down to ‘seamless’. True, seamless is more than-applied but in the payments space, it is the front-centre-back of driving digital payments. A seamless encounter right here is 1 exactly where the merchant faces no discomfort points at any point and exactly where the purchasers encounter is more quickly and simpler than paying money.
4. Safety – Data breaches certainly have a unfavorable impact on folks placing their digital instruments on the net. While hackers normally attempt to be ahead of the game, defenses against hackers are enhancing on a each day basis. Companies are investing considerable sums of cash to shop and transmit payment info safely and a sustained work right here is the only way to convince customers that their instruments are secure.
(By Sunil Rongala, Vice President – Strategy, Innovation & Analytics, Worldline India)