Digital Payments: Future Opportunities and Challenges

We all are using digital payments, but the industry saw a massive boom post the implementation of demonetisation in November 2016. According to the National Payments Corporation of India (NPCI), the value of the BHIM Unified Payments Interface (UPI) transactions skyrocketed to INR 1 Tn while the volume of transactions reached 913 Mn, up from a meagre 7 Mn in April 2017. And in September 2018, UPI transactions increased to 405 million from 312 million in the preceding month. In terms of value, UPI transferred Rs 59,835 crore in September against Rs 54,212 crore in August, a 10.3% jump.

One can imagine the growth of digital payments in 2019. This creates a huge opportunity for digital payment vendors as well as challenges. We spoke to Ajay Adiseshann, Founder & CEO, PayMate India Pvt. Ltd. to understand the future.

New opportunities for the digital payment industry

From a B2B payments perspective, we expect to see an increase in payments, accounting and workflow automation adoption for Cloud-based solutions and SME’s willingness to pay subscription fees for such services to help them better manage their businesses.

Challenges for the industry in 2019

2018 has been particularly hard on fintech especially consumer lending fintech with the collapse of the India stack for authentication after the supreme court ruling against Aadhaar based authentication. We expect that to continue to impact the industry even if concessions are made since the user experience and cost for KYC would continue to impact the industry. The regulators and stake holders need to take a holistic view and see how we can unshackle ourselves from this disadvantageous position.

The utilisation of Machine learning

As a payments platform processing millions of transactions, we are starting to use machine learning to better understand customer behaviour and in turn, help us cross-sell other services in the best possible manner to the businesses on our platform

The business spectrum

We are a full stack, cloud-based, B2B payments, lending and marketplace for the supply chain. This makes us unique and differentiated because we are able to cater to the entire spectrum of solutions in supply chains which make it very sticky for customers on our platform.