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 minimization and localization 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 realizing its vision of becoming a truly digital and cash-lite economy.
About the author
Manish Jain is Partner, Digital and Fintech, Management Consulting at KPMG in India. He has a total of 22 years of experience in Financial Services, Business and Technology Advisory, Digital and Core Transformations.
Prior to joining KPMG, Manish headed the Banking practice in E&Y and Solution Consulting Practice in Infosys. He also worked with renowned financial institutions like ICICI Bank, ABN Amro Bank NV and Max New York Life Insurance and helped them in setting up their business and operation processes in India. Manish advised and helped the emerging payment banks and small finance banks in their transformation journey. In the previous role, he managed the largest digital and data transformation in the country for a financial services client.
