Digital payments have been on the rise in India during the past few years. With the advent of the game-changing policy of demonetisation introduced by Prime Minister, Mr. Narendra Modi, it has become inevitable that digital payments are here to stay. The change is so revolutionary that it brings out an interesting commonality between a street peddler in India and top central bankers and finance ministers. Both can benefit from the digital boom. It has spread across the world, but has grown much faster in India, in recent times.
Let’s take a look at some of the factors that are responsible for this boom:
The Demonetisation Effect - This is a major reason for the sudden growth of digital payments since November 2016, when the government demonetised, declaring that 86 percent of India’s currency in circulation would cease to be legal. In came digital payment platforms to save the day for the country’s population, allowing us to make transactions of various kinds, in turn; an exponential rise in the traffic on these platforms. Looking at the larger picture, more and more people are coming into the banking fold and more financial transactions can be accounted for. Most financial bodies around the world, be it IMF, World Bank or the World Economic Forum - are declaring this as one of the top developments that can have a huge impact globally.
Expanding Use of Smartphones - Four years ago, mobile payments didn’t even exist in India. But the smartphone wave has hit the whole nation. The next few years will see about 70-80% of the population owning smart phones. Not too long from now, we would simply be able to tap our card or phone to a device to purchase a product or a service.
Offers, Rewards, Cashbacks and Discounts - One thing that attracts all consumers is the promise of getting something free with a product, or some kind of a reward, cashback, or discount. These are some really impactful factors that are responsible for consumers preferring digital payments as opposed to other payment methods. This shift will inevitably lead to the so called conventional methods of today, turning into unconventional ones. When we make digital payments, we get more spot discounts with immediate benefits. That’s a good enough reason for us to choose online payments. Plus, one doesn’t have to worry about the availability of cash while receiving a product or a service.
So, we can all agree that it’s this need for convenience which has brought about a boom in the digital payments industry.