India finds itself at a pivotal crossroads in its financial history, with the traditional contours of commerce being redrawn at an astonishing pace. The meteoric rise of digital payment platforms, most notably the Unified Payments Interface (UPI) and the proliferation of digital wallets, has been the catalyst for this remarkable transformation. The ripple effects of this dynamic shift in the payments landscape have extended far and wide, affecting businesses, industries, and, most importantly, the daily lives of millions of Indians.
The repercussions of this digital revolution have left no sector untouched, from the bustling streets of urban marketplaces to the far reaches of rural hamlets. The payment ecosystem is evolving at such a rapid pace that it has created a perplexing puzzle for stakeholders across the spectrum — be it entrepreneurs, policymakers, or everyday consumers.
To unravel this puzzle and answer a few complex questions, TechSparks 2023, the destination for deliberating, deep-diving, and understanding the promise of India’s Great Indian Techade, hosted a panel of eminent experts: Prashant Sharma, VP, CX, Risk and Payments at Gameskraft; Nishchay AG, Co-Founder and CEO at Jar; and Sumit Agarwal, SVP, Product and Business (Fintech & Payments) at MakeMyTrip.
Ankit Gaur, Head of Payment Gateway and Online Merchants at PhonePe, led the discussion with insights from his extensive experience.
Gaur kickstarted the session by highlighting the pivotal stage at which India’s payment landscape finds itself. He underscores the rapid evolution driven by the emergence of digital payment platforms and UPI wallets.
“India is at such a crucial juncture. Payments have evolved so rapidly over the last few years, with the advent of digital payment platforms and UPI wallets. The consequences of this rapidly changing ecosystem are so far reaching on these businesses. Today at TechSparks 2023, we’re uncovering how this ecosystem is evolving,” he said.
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Payment options and the idea of less is more
Agarwal shared how most companies look at payments as a far more integral part of their journey. Instead of offering a plethora of payments for consumers to complete transactions, payments need to be viewed as a state of mind for the consumer.
“The consumer might be willing to pay now, the consumer might be willing to pay later, or the consumer might be willing to pay in parts or EMI. All three should have a very different consumer experience. If the customer is new and they prefer to pay right away, we should give them all kinds of payment options.
“If it is a repeat customer, a loyal customer, then instead of giving them several payment options, it is better to just give one or two options that the customer is familiar with. While the customer is in the funnel, they should be made aware that the option to pay later exists. The payment page itself is not required right away. It is no longer success rate as the metric to drive payments; it has to be looked into holistically with overall commerce,” he explained.
Agarwal emphasised a fundamental shift in the way companies approach payments in the digital age. The idea that payments should be viewed as a ‘state of mind’ for consumers highlights the importance of personalisation and customer-centricity in the payment process. Understanding the timing and method by which a consumer prefers to pay is crucial for enhancing the overall shopping experience and, ultimately, driving customer satisfaction and loyalty.
Closing the payment gap
Nishchay spoke about anxiety management, from the time the payment happens to the time the goods are delivered.
“I need to truly understand the anatomy of the payment from a common man. All payments that till 2020 (pre-COVID) were by the top 1% of users. If you take them out of India and put them anywhere else, they will still come with the same level of comfort. They understand the technology and know who to call if something goes wrong.
“But, if you have to cater to someone even 100 km out of Bangalore, the kind of anxiety that they go through is totally different. We need to manage the experience of payment, the level of familiarity that we provide at every stage is the differentiator. That’s why we don’t try to build all the stack for payments. We heavily rely on well-known and adopted products,” he reveals.
To address an existing disparity, Nischay said the payment experience should ensure familiarity and trust for less tech-savvy users. The key factors he highlighted are speed, familiarity, and reliability. A seamless and error-free experience, particularly for small transactions, is needed to reduce the stress and anxiety associated with digital payments for a broader demographic.
Sharma spoke about the high-speed and high-stakes nature of the gaming industry, where users demand instant credit for in-game transactions and the ability to withdraw their winnings promptly.
“If you want to add cash, it has to get credited right away. Only then, you can play games quickly. And if you win, you can withdraw right away as well. That’s how the industry is. We need to ensure that people are able to add cash and withdraw seamlessly,” he says, adding that this fast-paced environment also attracts fraudsters.
Sharma’s approach to managing these challenges is adopting an adaptive risk strategy. “It’s an approach that I have personally invested in, to balance it out. This means that you need to look at your data, figure out the outliers, and keep checks accordingly. If there are some good users, their experience should not be hampered due to those checks,” he said.
An adaptive risk approach allows companies to stay ahead of potential fraud while ensuring a smooth experience for genuine users.
The way forward
The discussion at TechSparks 2023 shed light on critical aspects of the evolution of India’s financial landscape. These insights reflect the multifaceted nature of the financial revolution in India, demonstrating that success in the digital age hinges on understanding and addressing the diverse needs and challenges of users from all walks of life.
As India navigates this transformative journey, it’s not just about payments; it’s about shaping a more inclusive, secure, and technologically empowered financial future for all.
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