By TR Ramachandran, Visa
As we head into 2019, all signs point towards a more digital future for the world of payments. More so for India, a market that has over recent years emerged as a global payment innovation hotbed.
Intense competition and innovative payment solutions have been on the rise, all for a share of the consumer’s wallet. While crystal gazing isn’t for the fainthearted anymore, here are a few payment trends that we believe might be worth betting on this new year:
Wallets have to shape-change or perish
Wallets have been the poster child for India’s post demonetization phase. Their ubiquity, simplicity and low cost of adoption have differentiated them from other forms of digital payments. However, the year gone by was a stark reminder on the need for payment experience to remain seamless, interoperable and secure while being compliant with regulatory requirements.
The RBI’s new PPI (prepaid payment instruments) guidelines bring about much-needed interoperability, allowing customers to transact between wallets. This alone will result in new age pass-through wallets that tokenize account credentials and provide a secure and seamless payment experience.
Revenue models based on subsidized payment solutions funded by cross-selling other products and services might be short-lived.
Desi needs, local solutions
In 2019, UGC (user generated content) platforms will learn to monetize the growing non-English internet user base in the country through micropayments, in-app advertising, and customized subscription models among others.
This will also fuel innovation around access to credit through micro-lending, offline and online loan disbursement and instant credit facilities for new digital consumers.
One-click payments for m-commerce first consumers
With smartphone penetration expected to soon reach 400M subscribers in India and a majority of e-commerce being done through smartphones, one-click payments are critical for businesses to improve payment success rates.
2019 will ring in this secure one-click payment experience for a rapidly expanding set of mobile-first consumers. Traditional e-commerce websites will also transition into easier checkout experiences in a bid to boost customer stickiness and average online spends per buyer.
POS is the new OS and Big tech the driver
2019 will witness big tech players such as Google, Paytm, Reliance Jio and WhatsApp stepping in to expand their digital payment acceptance network. This will help reduce the gap between card issuance and acceptance with asset-light devices and innovations like ‘pin on glass’ that enable the smartphone to accept payments, providing convenience at scale.
As digital consumers shift between channels, the lines between offline and online experiences and players will blur, driven by intuitive UIs and seamless payments. Big tech will propel POS as the new OS in 2019.
The contactless debit card will lead the charge against cash
This year will witness consumers realizing the full potential of the humble debit card and its new avatar of contactless cards. With 998M debit cards in circulation today and rapid issuance of contactless cards (roughly 30M), the tap to pay experience is set to replace cash in wallets.
Propelled by a slew of awareness campaigns and promotions from banks, networks, merchants and the government, debit cards are set to become the most convenient and ubiquitous option in India.
Move over kirana – Transit payments are the new poster child
In 2019, transit will act as a mass use case for digital payments, with metros, tolls, local rail networks in India and public transit payments through contactless cards set to take off on a large scale.
In London, half of all underground and rail journeys are now through tap and pay cards and mobile devices. It is reported that cashless payments can reduce transit system spends from 14.5 cents for every physical dollar collected to 4.2 cents per digital dollar. With the growing number of daily commuters in India, the preferred choice for 2019 will be a single, interoperable, digital-first payment mechanism.
(TR Ramachandran is Group Country Manager – India & South Asia for Visa. Views expressed above are his own)
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