With the vision to empower an exceptional payment experience and the setup of a regulatory sandbox for fintech firms, India seems to be moving in the right direction, which is towards digitization and innovation in payments.
We believe that digital financial inclusion can be achieved by offering a sleek and simple payment experience, with voice and vernacular adaptability. The Pradhan Mantri Jan Dhan Yojana (PMJDY) has made it easy for billions to avail of a debit card and is targeted to achieve at least 44 percent of total debit card transactions at Point of Sale (POS) by 2021. POS, in the future, will not be used as payment acceptance devices but as a bundled service with inventory management, business to business/customer payments, lending, financing, GST invoicing, etc.
Cross border remittances still remain a costly affair with consumers and corporates across the globe still trying to work around it. In the last five years, even the trusted and proven correspondent banking approach has encountered challenges, mainly from emerging solutions, which are transcending industry fundamentals. Going forward, we could expect banks offering simple, intuitive, and permissible processes to remove frictions in exchanges, clearing, and financial institutions. Technology support to the banks, which is inclusive of non-time bound services, better exchange rates, and smart reconciliation with intelligent automation across international and domestic remittances in line with global trends is the need of the hour. Going forward, the industry also needs to be wary of data security, secure identity and data privacy in digital payments. Data minimisation and localisation as well as implementing a robust and resilient payment infrastructure with AI capability, so as to predict frauds and provide alerts instantly on 24×7 availability may be imperative. Also connecting the last mile, by creating awareness in local administration and incentivizing people who are going cashless, will be imperative.
To sum up, if we are looking at creating a ‘digital only’ ecosystem in India, we need to work towards empowering and educating every citizen with digital literacy. This, then will firmly put India on the path of realising its vision of becoming a truly digital and cash-lite economy.