Trends that are Shaping Payments in India

Remember when pocket money used to be in the form of coins and you owned a piggy-bank? Or when your parents handed you cash for college? Unless you lived away from your parents, money used to always be handed down in cash. Even if you did live away, you would walk to a nearby ATM and withdraw that money in cash. Fast-forward to today, it is common for children to get pocket-money directly through GPay. They don’t need to withdraw it because almost every shop, vendor, hawker even and means of transport use the Unified Payments Interface (UPI) as a payment mode.

India’s payment landscape is dynamic, but it is safe to say that two prominent experiences that we faced as a nation pushed us into creating and using more innovative methods of Payments; Demonetization and the Covid Pandemic. Both these situations enabled us to be more accepting of Digital Payments. We make payments now by scanning QR Codes, send money using apps which don’t belong to our bank but are linked to it, use e-Wallets and link payments through them. 

Fueled by technological advancements, changing consumer behaviour and Government Initiatives, India is undergoing a dynamic transformation in Payments. UPI has become the backbone of digital payments in India, as it offers seamless and instant fund transfers through mobile phones. Digital wallets like Paytm, PhonePe and even AmazonPay link up with your utility bills and provide attractive cashback offers with every payment made. 

Here are some of the other trends that affect payments in India:

i. Contactless Payments and NFC Technology including cards, watches, bracelets helping customers to tap and pay

ii. Different applications have their own digital wallet, like Ola Money, which can also be used to make other payments as well

iii. Growth of Buy Now, Pay Later (BNPL) services which help customers to pay at their convenience, when they can

iv. Government-led Initiatives like Bharat Interface for Money (BHIM) and Aadhaar enabled Payment Services (AePS) which strongly help in encouraging financial inclusion

v. Online marketplaces have made it exceedingly convenient for customers by integrating different various payment options like UPI, Wallets, Cards and Internet banking

vi. Advent of Digital Currency in the form of Crypto and eRupee is being explored due to blockchain technology

As India marches towards a digital future, these trends underscore the dynamic nature of payments. From the convenience of UPI to the transformative potential of cryptocurrencies, each trend contributes to a financial ecosystem that is evolving swiftly. The journey towards a cashless India is not just a trend; it's a paradigm shift that holds the promise of greater financial inclusion, efficiency, and innovation.