2017 WILL BE A BUSY YEAR FOR DIGITAL PAYMENTS
In the last one year, various initiatives by the Indian government under its Digital India program, resulted in the rise in mobile and internet transactions. The demonetization drive towards the end further pushed Indians to adopt digital payments and spearheaded India’s strive towards a less-cash oriented economy. The digital payments sector has seemingly been busy all throughout the year. While in the beginning, it was about finding a sustainable model for customer acquisition, towards the end, the sector was perturbed with a sudden and exponential increase in the demand.
Although the digital payments sector was slated to grow into a USD 80 to 100 billion market by 2020, the recent demonetization drive has further up its stake and the sector is expected to touch with USD 500 billion landmark in the next 3 years. The entire sector comprises mobile wallets, intent banking, point of sale, payment gateways and value additions, such as mobile recharges, bill payments and more. In fact, during the FYI 2016-20 alone, mobile banking users alone are considered to grow at a compounded annual growth rate of 27%. Standing in the very beginning of the new year, let us figure out how the sector is expected to emerge in its full bloom.
BANKING, FINTECH SECTOR SET TO BOOM
India is set to follow in the footsteps of China and observe a boom in the FinTech landscape. Enabled by the increasing aspirations of present day consumers, 2017 appears to be the year for the FinTech. There has been an increasing demand for fast-tracked and streamlined financial services and following the recent push by the Government of India, one can easily expect financial inclusion, brought about by the FinTech players. Mobile payments are also going to be in the front, while driving this change. Wealth management shall also mark the undertone of FinTech’s massive adoption in India. Furthermore, the risk scoring algorithms and such platform will play an instrumental in democratizing access to financial services, while making the procedures more intuitive, organically sustainable and happen quickly.
DIGITAL PAYMENT SERVICES TO BE AVAILABLE ON-DEMAND
With smartphones becoming easily affordable and internet reaching the masses dwelling outside the urban peripheries, payment services will be made available on-demand. There isn’t going to be 3 days or a similar window, as observed traditionally by the Banking and Financial sector. New players are disrupting the sector with quicker deliveries and turnaround time. Deploying the best of technology, including big data analytics and artificial intelligence, a majority of otherwise time consumer procedures are getting automated, further enabling the on-demand model.
WELCOMING DIGITAL ASSISTANTS IN THE PAYMENTS SECTOR
2016 witnessed several startups providing Digital Assistance, replicating the tasks of the service sector. Several smartphones already have their own virtual and personal assistants, for instance Apple’s Siri. With more emphasis on faster processes and industry-wide automation, Digital Assistance will become a part of the FinTech sector as well. The present day’s digital assistant apps are powered by Artificial Intelligence and Big Data Analytics and hence, are fully capable of assisting users on a particular activity or transaction, or helping them in finishing a particular action. Driven with the goal to providing users with the most convenient, fast, intuitive and real-time solutions, several FinTech and digital payment solutions providers will be further adopting the change.
MORE COLLABORATION IS COMING OUR WAY
We have already witnessed consolidations happening in the e-wallets sector, as reflected in Amazon acquiring Emvantage, Flipkart taking over PhonePe and more. Furthermore, newer apps are mushrooming every day in the digital payments landscape, each one solving a particular challenge or the other. However, offering customers an extensive range of services happens to be at the epicenter of various businesses today and hence, one should expect to see more consolidation, mergers and acquisitions happening in the space. The idea would be to collate and curate different set of specific services under a bigger umbrella of superior, advanced and high-tech digital payments services.
We stand amidst interesting times ahead and it remains to be seen what more innovation and disruption the sector will undergo, as the months uncover.
Published in CXOtoday.com, 18 January 2017