Most experts believe the real-time payments system is a financial revolution that post-independence India witnessed. Unified Payments Interface, aka UPI, came as a blessing in disguise for the country. Guess What? Pandemic is not the only event that pushed the UPI market to take a big leap. UPI systems in India surged twice with two major events.
Although it has been more than a decade since the country was introduced to UPI, it was in 2016 when digital payments first picked up with a huge boost. When the country was undergoing demonization, it was new-age technology that gave more options to consumers in the payments space.
When the CEO of Amazon Pay, Mahendra Nerurkar, spoke to the media in one of his interviews, he shared how the Amazon Pay feature was introduced in 2020. “Since then, we have recorded two million customers using the feature on the platform with around 10 million transactions clocked till June, 2021,” he added.
That alone explains the rapidly increasing mid-pandemic demand for digital payments in the country.
What earlier was known as a cash economy, the digital payment systems have driven the country to become one of the rapidly growing financial economies worldwide. That being said, the transformation is still underway since the new economy requires a policy framework and authoritative system.
One of the market analyses that became popular pur forward how Indian consumers got attracted to cashbacks, rewards and offers. These became the central driving factor to charmed increased smartphone consumers with easily available cheaper internet.
Recently, Phone Pe launched the COD feature for its financially orthodox users who are more comfortable with payment at the time of delivery. It allows consumers to make payments digitally at their delivery doorstep! Head of Strategy Kartik Raghupathy shared how the new feature will drive contactless payments for such customers.
If we dig into why and how digital payment companies could make it in the Indian market, the following observations shine the most!
- Of course, UPI made the real-time payment process easy while also saved time. All customers needed were their phone numbers and bank account details to start e-paying.
- The internet penetration rose exponentially in the past couple of years, especially during the pandemic.
- As said earlier, demonetization and pandemic became the two major events when the Indian digital economy skyrocketed.
- Owing to incentive-centric demand, UPI market players made cashbacks and rewarded their point of sale. The move indeed attracted a huge lead pool.
Although India has a growing number of internet users, there’s a large population still in the shadow, not using the internet. Additionally, the lack of education has made Indian smartphone consumers prone to e-fraudulence. Finally, the lack of a regulatory system has created holes in the wildly growing e-payment industry.
In a nutshell, India has come a long way in the development of the digital economy. However, the road is neither short. Industry experts await the new innovation and regulations that bridge the gaps in the Indian payment space.