March 17, 2017
Digital transactions have been consistently on a rise, ever since the demonetization announcement by the Indian government in November 2016. While the e-wallets took care of the everyday consumer-centric transactions, payments gateways had larger shoes to fill, especially when we factor in the transactions with the bigger ticket size of transactions. Helping merchants receive payments and continue operations despite fiscal deficits and cash crunches in the economy, payment gateways have remained active as the unsung heroes of India’s strive towards a lesser cash-oriented economy.
The Union Budget of 2017 further revealed the commitment exhibited by the Government of India towards transforming India into a cashless economy, by strengthening the digital infrastructure. While the villages and Gram Panchayats will be connected via high-speed internet broadband and Wi-Fi hotspots, the government also laid provisions for strengthening the Fiber Optics network in the country. Furthermore, there is now an upper cap on the cash-based transactions of 3 lakhs rupees. Hence, one way or the payment gateways definitely have a greater role to fulfill in the coming years. Here’s deciphering the role of payment gateways in a post-demonetization era in India.
Consumer Education and On-boarding
The digital wave is definitely headed towards the rural India, as mentioned above. However, changing consumer behavior takes more than simply making high-quality internet available at their disposal. With the existing low levels of digital literacy, especially in rural India, payment gateways have to step a notch up and invest time and resources in ensuring optimum consumer education.
The On-boarding process needs to be revamped, looking into the individualistic needs of the new sections of the merchants coming online. Payment Gateways and service providers may need to establish their offline touch points, to answer to user queries, give them an experience of the platform and address any challenges that they experience. At the same time, we need to ensure that the on-boarding is smooth and time-efficient.
Just in October last year, details of 3.2 million Debit Cards were stolen from a mix of banks, indigenous card schemes, RuPay platform and the likes. Several of the leading banks in the country, including HDFC, State Bank of India, Yes Bank, ICICI, Axis Bank, amongst others were not spared from this attack.
With the demonetization, there is a great deal of money flowing around in the digital circuit. Without shadow of a doubt, the online world is going to attract a number of new and much smarter phishing and other cyber-attacks. After all, hackers and cyber scammers have not remained immune to innovation! The lack of digital literacy, most prominently in digital India is directly proportional to more vulnerability towards cyber-attacks.
If anything, the cyber-attack should only inspire us in making the platforms continuously more secure and lower risks attached to such attacks in future.
2017 is perhaps going to be the year when we all get back to our basics. We need technology backed, robust and secure platform, minus the fluff. In fact, the fluff might just distract the new users, which, merely to recap, are digitally uninformed and perhaps intimidated by the online world.
Instead of disrupting the status quo, payment gateways and service providers should focus on bringing in a dash of simplicity for the purpose of making their platforms more merchant friendly, and hence, accessible by online sellers, whether small or large.
In the end, consumer awareness seems to be the call of the hour. Even in the technology charged up an environment, people are often the weakest link in the security chain. And any chain is only as strong as its weakest link. Via social engineering, tricking behavior etc, humans can be manipulated in a number of ways online. Especially when this is perhaps one of their first-ever serious outings in the digital world and they are quite unaware of all the ways they could be scammed or tricked into giving away the key to their hard-earned money. Investments need to be made in upgrading the existing levels of consumer awareness and seller awareness.
And this is a responsibility payment gateway and solution providers need to shoulder with the Government. The economic conditions of today call for the stakeholders of the digital economy to come together and ensure the transition is smooth, effective, seamless and secure.