Over the past decade, the payments industry in India has undergone a major transformation with the increased penetration of the internet, mobile phones, and exponential growth of the digital payment ecosystem. While everything was changing at a certain pace, a sudden disruption in the form of Covid-19 has changed the world fundamentally, altered the way consumers think, behave, and adapt to the ‘new normal’. And while the consumers do that, it is important for businesses also to change the way they function and adapt to this new normal just as swiftly.
If we look at the payments space today, the new normal is not about developing new technologies but it is the accelerated and widespread adoption of digital payment technologies and solutions that already exist. It has changed the position of payment digitization from being a luxury to a necessity and brought the POS terminals, micro ATMs, and contactless payments to the center stage. The new digital future of payments is set to help customers towards accessing financial options as well as businesses to grow across borders.
Businesses Should Cash In on Cashless Payments Right Now
What is cashless payment? Well, cashless payment can be defined as the use of credit cards, debit cards, UPI, IMPS, mobile wallets, net banking, etc. for making payment transactions instead of using currency notes. Due to the Covid-19 situation and strict social distancing measures put in place, huge customer interest is being witnessed in cashless payments. Since handling currency notes have the potential of contamination and spreading the Covid-19 virus, people are adopting cashless modes of payment. While billions of people in India are eager to partake in this change, businesses should leverage new technology to deepen customer engagement and cash in on the cashless payments right now.
POS Terminals and Possibilities – The POS terminals have helped in taking a giant leap towards a cashless economy and society. A Point of Sale system consists of hardware and software which helps customers to make payments using every type of payment method. It has also enabled Aadhaar authenticated deposits and withdrawal which is helpful in a country like India. For instance, the KYC process was made extremely easy through Aadhaar. This, in turn, has helped the underserved to open accounts and benefit from the schemes like Jan Dhan Yojana and come under the financial inclusion program.
Similarly, it is revolutionizing banking, cash deposits, and withdrawal process, and fund transfer too without the hassle of submitting photographs, documentation, and other traditional requirements to avail such services. This has opened a world full of possibilities for banks to engage customers. As per the recent reports, 4.98 million POS terminals were deployed by merchant acquiring banks in December 2019.
There is no denying that Covid-19 will further push the adoption of digital technology and broaden the digital payment ecosystem. In fact, it has already gained significant momentum since the lockdown and the following section corroborates the growing trend of going cashless.
Cashless Payment Is Here To Stay
Customers, since lockdown in March, have preferred Point of Sale – POS terminals over ATM’s. According to the recently released RBI report, there were 2,34,000 ATMs and 5.08 million point-of-sale (POS) terminals. The cash withdrawals from ATMs declined by 47% to 286 million in April whereas withdrawals from Aadhaar enabled payment systems – AEPS using micro ATMs doubled to 87 million from 34 million. Apart from that, cash withdrawal volumes at POS terminals grew 21%, an increase to 4.8 million in April from 3.3 million in March. The numbers speak volumes about the growing inclination towards digital payments among the customers today.
The Rise of Contactless Payments
According to estimates, the global market size of the contactless payment industry is expected to grow from 10.3 billion dollars in 2020 to 18 billion in 2025 at a CAGR of 11.7%.
In India, Covid-19 has compelled people to make the move towards contactless payments. And a large population (77%) believe that the shift to contactless payments is here to stay as health concerns remain.
Contactless payments are transactions where cards use NFC – near field communication or RFID technology. With the increasing penetration of smartphones in urban and especially rural India, the NFC enabled smartphones is a game-changer as far as contactless payments are considered. It is simple and effective as just a tap & pay method will help both the customer and the merchant. Generally, there is a contactless payment symbol on the POS terminal which looks similar to the Wi-Fi symbol. Customers can bring their card a few inches from the symbol and the payment is made. Since there is no need for a PIN, it is one of the safest ways to conduct transactions.
Furthermore, customer can use their mobile phones to scan and pay. It enables customers to scan multiple products they are shopping and in the end, can make the payment. QR codes are one of the most popular ways to make payments at a safe distance and avoid physical contact.
One of the reasons customers prefer contactless and cashless payments is because it means shorter lines, faster checkout experience, better convenience and saves a lot of time. This means more shopping and hassle-free experience. And when it comes to businesses, it makes the life of retailers easy by improving operational efficiency and minimizing operating costs.
Time to Fast Track Contactless and Cashless Payment
More than ever, businesses across verticals, big and small organizations, and banks are replacing physical services and promoting digital equivalents due to the social distancing measures in place.
The support for digital payments has come from all quarters such as Reserve Bank Of India as well as the National Payment Corporation of India (NPCI). The RBI governor Shaktikanta Das has advocated for contactless payments in particular. The Reserve Bank of India has also allowed tap-and-go functionality on card payments for all purchases, even above Rs 2000 with a PIN, at retail stores and shopping centers. At the same time, the NPCI has released a circular urging Indians to use digital payments, promising robust digital payment infrastructure to support the digital ecosystem. This is to promote social distancing and avoiding contact by removing the need for cash notes and coins.
At a recent CII’s fintech and digitization seminar, Amitabh Kant, the chief executive of government think-tank NITI Aayog said that “India is targeting one billion digital transactions per day in a push towards bringing more people under the ambit of such modes of payments. From three billion transactions in a month we are targeting a billion transactions per day and we are pushing for it.”
*Takeaway for Businesses– One of the key takeaways for businesses from the recent developments in the digital payments industry is that awareness about the cashless and contactless payment technology is at an all-time high. Customers and the authorities have realized the power, potential, and potency of digital payments. Therefore, it is the best time to leverage the power of such technology and digital devices and use it. This will eventually boost profits and lead to growth for businesses.
Leap into the Digital Future with Evolute
Adapting to the new digital future, Evolute is all set to techpower the payments landscape with cashless & contactless payment solutions. With an innovative mindset, Evolute offers a wide range of products and services which include POS terminals and micro ATMs, biometric authentication devices that make digital payments fast, easy, and secure.
A device like Android POS terminal UNIPOS A5 is one of a kind and India’s first omnichannel payment solution with integrated functionalities where multiple cards, biometric identification, and digital payment channels can be used. The features include multi-biometric authentication such as fingerprint scanning, voice & iris recognition. It is NFC enabled too which gives multi-payment options ranging from contactless to card payments. Also, Falcon is a discrete micro ATM that ensures seamless transactions and helps in banking, institutions, and E-governance. Businesses can use convenient and affordable financial services and products from Evolute and transform the way payments are done. Evolute is an Indian company with the aim of making India a self-reliant nation and an economic superpower. The Make in India philosophy is deeply ingrained in all the products and solutions and it has helped us deliver the best products and solutions. We aim to deliver highly innovative solutions in the payments industry, keeping Indian people and Indian industries in mind. Visit for more details www.evolute.in
