Demonetisation supplied a digital thrust towards creating India a much less-money society, even though the Covid-19 pandemic highlights the have to have of transacting on the web. In truth, in the last 5 years soon after demonetisation, India has taken some massive methods towards a digitised economy.
“India continues to be one of the fastest growing digital consumer bases. As per the Confederation of Indian Industry (CII), we have 119.52 crore telecom subscribers and 68.76 crore internet subscribers—millions of Indians have easy access to the Internet and social media. Over the last 13 months of a global pandemic, several consumer behaviours have changed—from the surge of TikToks/TakaTaks to the rise of digital transactions,” stated Amit Das CEO and co-identified of Think360.
Some of the alterations occurred soon after demonetisation involves developments in mobile wallets, introduction of Unified Payment Interface (UPI), improvement in on the web banking payments like – NEFT, RTGS, IMPS and so forth.
“Better engineered processes have helped Paytm, Google Pay, Phone Pe, etc. drive an unprecedented growth in digital payments. It creates a distribution leverage that can be unlocked further with mandatory interoperability. Any wallet/PPI can ride the distribution network created by another (or a bank)—for a fee. For customers, it means easy transactions through their preferred wallet,” stated Das.
Growth in digital loans and other other innovations have also elevated its reputation.
“Almost all wallets have partnerships for distribution of other financial products—loans, insurance policies, investments (digital gold, if you prefer!). A larger limit would ensure people use the wallets as a significant financial relationship conduit. It also creates greater incentive for individuals to move a larger share of their transactions to these PPIs,” stated Das.
In truth, through the Covid-19 pandemic, Aarogya Setu app downloads peaked in April 2020 at 80.8 million, even though the CoWin app (amongst functionality difficulties) had 8.3 million registrations on the day vaccination became obtainable for 18-45 age group. However, these are non-trivial numbers when evaluating the digital chance in India.
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While PhonePe lately hit a billion transactions in a month, a current RBI announcement has brought wallets (such as Paytm, Mobikwik, and so forth.) practically at par with banks at service offerings level. Let’s talk about the ramifications.
Does it imply some thing for the consumption of Financial Services in India?
“Of course. At the very least, the pace of adoption, and at the best, a complete upending of the financial services landscape,” stated Das, adding, “To start with, the biggest differentiations of modern PPIs are lower friction, better user experience, and a far higher transaction success rate. While it increases the possibility of higher fraud/risk, a full KYC (bank-grade) process will help mitigate a large part of those concerns. Customers, over the last year, have adopted Video-KYC products (like Kwik.ID) for availing financial services from home. Financial institutions have continued to serve customers even during the pandemic.”
“For a significant shift in digital’s share of wallet, players will drive product innovation for customers, like digital gold, micro-investments, buy-now-pay-later, salary advance loans, etc. Such product innovations will require data enrichment of a different sort enabled by products like Algo360. By casting the net wider, and reducing the entry barriers, we may see a change in savings and investment behaviour of a larger population segment,” Das additional stated.
The RBI is also hunting to award New Umbrella Entity (NUE) for payment licenses in this year.
“It will help create greater investments in developing digital payment rails and a wider reach for the right for-profit reasons. The companies applying for these licenses are looking to launch a comprehensive set of offerings and build greater distribution reach,” stated Das.
“Overall, the recent moves are extremely positive news for the innovators, and, definitely, for the customers,” he added.