Digital everything has become the “new normal” over the past two years. The consumer behavior, technology advancements and regulatory policies are collectively pushing the needle for digital adoption across all the industries, with the rise in “virtual” here to stay post the pandemic. This includes remote & hybrid corporate working models, virtual meets & conferences, online platforms for education & upskilling, and definitely – Digital Payments.
With 48 billion digital transactions recorded in 2020-21, Digital Payments are the fastest-growing reality that India is adopting. In terms of volumes, digital payments have grown 5x from ~ $140 mn (in 2016-17) to ~$800 mn (in 2020-21), and the digital payments market in India is expected to increase by 3x from $300 mn (2020-2021) to $1 trillion by 2025-26. As India moves towards a cashless economy and businesses embrace digital innovations, we will today dive into – What are Digital Payments? What are the different modes & channels of Digital Payments? What are the benefits of Digital Payments? How Digital Payments impact Businesses?
Digital payments are transactions that take place via an electronic medium, with no physical exchange of cash or cheque etc. In a nutshell, this means that the payer uses a digital/electronic medium to transfer funds to the payee, and the payee also uses a similar method to accept these funds.
Digital payments are not only limited to online channels (i.e., internet) but can also happen across offline channels – instore & at your doorstep. For example, if you buy something from Flipkart or Amazon and pay for it via Card, it qualifies as a digital payment (Online Channel). Now, suppose instead of paying online at the time of ordering, you have opted for COD (Cash on Delivery) and chose to pay via UPI to the delivery person at the time of delivery, then that too is a digital payment (Offline Channel – Doorstep). Similarly, if you purchase something from your grocery store and choose to pay via a card or UPI, that also is a digital payment (Offline Channel – instore).
Over the last 5-6 years, Digital Payments have evolved beyond card-based payments with new age payment instruments, with focus on delivering a seamless, frictionless payment experience for customers, irrespective of their demographics & economic strata.
In a vast country like India, one witnesses many different social groups with varied access to financial services depending upon their socio-economic demographics. One of the key reasons why the Digital India program by the government gained momentum was that it tries to bring in financial inclusion for the hitherto unbanked or provide better access to those with minimal facilities otherwise at the last mile.
Some key benefits of digital payments across the overall ecosystem are mentioned below:
As businesses embrace digital transformation either for survival or to do things better & faster, they are realizing the value of Digital Payments as a convenient tool for accepting payments that are safe, quick, seamless, enrich consumer experience, lower the operational expenses of the business, and enhances their revenues.
As it is evident from the above points, Digital Payments has now become an essential infrastructure that needs to be embedded in service offerings by all the businesses in order to thrive and grow during the current times. This is true for any businesses, irrespective of their size – be it a startup looking to launch an online portal for selling its services or a large enterprise looking to create an omnichannel payment experience for its consumers. Digital payments need to be embraced by these businesses/merchants irrespective of their industries be it: e-commerce, utilities, retail, financial services, education, hospitality, travel, real estate, logistics, govt. services among others.
The first step for any business to incorporate digital payments is to partner with a robust, efficient, and trustworthy Payment Aggregator/Payment Gateway service provider, which would be able to meet the payment requirements of the business across any channel (online, offline, doorstep) and offer all/any payment modes for consumers of the businesses to pay. This third-party partnership is the most efficient & simplest way for a business to start collecting or disbursing digital payments across channels.
As a business, you need not look further than PayPhi (digital payment platform of Phi Commerce) – as a Payment Aggregator of your choice. PayPhi powers frictionless payments for businesses/enterprises backed by an omnichannel digital platform, deep payments tech expertise & vertical-specific insights. Using its omnichannel payment enablement strategy – PayPhi helps businesses digitize payments/collections, enabling them to accept any mode of payment (270+ payment modes supported) across all the channels – online, doorstep and in-store (offline), thereby enabling an inclusive approach to payments.