Riding on digital payments, does India have a long way to catch the leaders?
“The best payment experience is no payment experience,” said Tushar Singh, Lead Product (Payments and Subscriptions), Zee5. This is one of many profound insights emerging from the panel discussion on ‘Payments - The Merchant Acquisition Playbook’ at YourStory's flagship startup-tech event TechSparks 2021.
Usually, there are four stakeholders in a typical card payment — the card network, the card issuer, the merchant, and the consumer. Acquirers typically are found in the backend, despite their crucial role in enabling the digitisation of payments.
It is the acquirer, after all, that captures, authorises, processes and settles the transaction. Merchant acquisition and acquiring have evolved from a legacy processing and hardware business to a full-stack software and merchant services solution, favouring new merchant service providers and service players.
Nature of the payments landscape today
The current drive in the payments industry, according to Shobhit Mohan, VP of Marketing and Branding, PayU India, is innovation across the value chain to make experiences smoother for both merchants and end-customers.
The new RBI guidelines on recurring payments represent a significant change in the payments landscape. While this may encourage businesses to move towards subscription-based models and the breakdown of long-term subscription plans to monthly ones, Tushar also acknowledges that it comes with many challenges, including a huge failure rate that other merchants are experiencing from issuer banks, as opposed to the high success rates of one-time payments.
Weighing in on the same guidelines, Prasad Routray, Head - Corporate and Alliances, Airtel Payments Bank, stated that they were necessary to ensure the safety and convenience of the customer’s payment experience.
PolicyBazaar's Harsh Vardhan Masta, Zee5's Tushar Singh, PayU India's Shobhit Mohan and Airtel Payments' Prasad Routray in a panel discussion
The current state of the payments landscape provides huge opportunities for the insurance sector, according to Harsh Vardhan Masta, Head of Digital Payments, PolicyBazaar.com.
“India remains at a nascent state of insurance penetration in the country.is looking to capitalise on these opportunities by onboarding all major insurance companies. We are also confident in all the different payment instruments available to consumers today,” he said.
Reflecting on the rapid pace of digital payments in the last few years, Shobhit stated, “Our ecosystem has evolved to a point where every merchant in India today wants to accept payments online.” The more businesses accept online payments, the more advanced value-added services can be built on top of just the more “vanilla” payment acceptance, he shared.
Enabling seamless customer experiences
Harsh stressed on simplicity and seamless processes for payment methods. Noting how PolicyBazaar featured some of the biggest insurers on their platforms, he added, “With the rise of customer dependency on digital transactions, the focus of the company was to create seamless experiences for all stakeholders — from insurers to customers — on the platform.”
Zee5’s Tushar likes to focus on industry trends to create frictionless payment experiences for customers. Citing the skyrocketing UPI numbers, UPI autopay and the rise of Person to Merchant payments (P2M), he points out that these areas will see the greatest growth in the coming years.
Harsh Vardhan Masta, Lead-Products, PolicyBazaar
Towards a cashless future
Given today’s landscape on how every small shopkeeper and every micro SME are interested in building an online payment or online commerce experience, Shobhit shared, “A lot of our investment will go into building a set of products which enable every business, regardless of the size or their digital/ financial literacy, to succeed online.”
He continued to state that PayU’s endeavours would balance the upliftment of small businesses, while they continued to partner with the largest corporates in India to build the best payment experience for users. Another area of growth, he added, that PayU would bet on is credit-based payments as it endeavours to encourage more data-driven credit decisions on a consumer level and create financial instruments to help them do so.
Tushar stated that his focus was on one-click checkouts, which card network partners are set to provide. He also spoke about the potential of the BNPL model (Buy Now Pay Later) and the interoperability of PPI (Prepaid Payment Instruments) in enhancing the overall user experience.
Prasad Routray, Business Head, Airtel Payments
For Airtel Payments Bank’s Prasad, the offline space is 10 times bigger than online as he spoke at length about creating a strong offline payment presence. “Technology has to be adopted. The biggest cultural shock is, you bring the technology to Indians, but they have to adopt it, and that is the work that I think all of us are doing,” he said. Prasad strongly feels that India will remain a cash economy for the next 10 years.
Shobhit Mohan, VP of Marketing and Branding, PayU India
Shobhit spoke of how India had barely scratched the surface of recurring payments and subscription business models. He stated, “Don’t be surprised if six months to a year from now, our coffee, groceries, hotel bills, and everything is paid on a recurring basis instead of the one-time debit based payment that we’re all very used to.”
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