Digital Payments : The Current Scenario in India

Digital Payments : The Current Scenario in India

Neeraj boasts of a 19-year long career during which he has handled key roles across an array of companies such as ALBION, Aventail, SonicWall, CipherGraph Networks, Akamai Technologies and ALTEN, prior to joining PayU in 2016. Passionate about the fintech space, he has done his Executive Education in Fintech Innovation & Transformation from the National University of Singapore.

Looking back a few years back, we see that digital payments in India, although growing gradually was still not completely acceptable to people. They were still skeptical about making monetary transactions online because of cybersecurity issues and lacked the proper awareness about the various advantages digital payments offer. When the central government announced the demonetization of all 500 and 1,000 banknotes in November 2016, people had no choice but to start using digital payment systems. However, this was a major pinnacle of success for India’s economy, as people increasingly gained awareness about the factors involved in digital payment systems and embraced them with full heart. As a result, the digital payment solutions market in India witnessed a hockey stick growth, thus skyrocketing our country's economic growth rate.

If research firm Statista’s recent findings are to go by, the total transactional value of digital payments in India is expected to reach $180.4 billion in 2023, and this is further expected to be worth $321.7 billion by 2027, growing at a CAGR of 15.56 during the forecast period. Low access to the internet, increased smartphone penetration and the social distancing practices that people were forced to inculcate due to the Covid pandemic are b some of the major factors that are currently fuelling digital payments in India.

Siliconindia recently got the opportunity to interact with Neeraj Chauhan,CIO, PayU, wherein he shared his insights and thoughts on the current digital payments ecosystem in India and various other factors pertaining to the industry. Below are the excerpts of the exclusive interaction between Neeraj and Siliconindia 

What are your thoughts on the current digital payments industry in India?

We have just started, and there is still a lot to be done. Right now, we are still building the skeletal system of the Indian digital payment system. UPI is a chunk of it, and there are more systems coming with the help and guidance of our Government. In the future, all elements will come together like Lego boxes and the final picture will shape-up very beautifully; that will be the actual image of the Indian digital payments system.

It has been six years for me in a financial institute, prior to which I was in a core product company. One of the major reasons why I opted to join the fintech space was because these fintechs are solving the grass root level problems of the people. There are two areas – education and finance. If you can contribute directly to the citizens of our country, it’s a very noble thing to do and we get self-satisfaction as well.

How has digitization fuelled the demand for digital payments?

Digitization spread awareness and gave a very transparent and visible message to the common man that if they use payment services in a more digital manner, it will be beneficial for them and they can have a very good user experience along with enhanced security in their transactions. Every fintech company is solving the needs of the customers. This is very important because failing to do so would lead to not being able to match the speed of our country’s economic growth.

What are some of the latest technologies disrupting the digital payments space?

I see this aspect differently. Technology is a mindset and it is up to you as to how you use it. If you are positive and wish to serve the nation, you can find a way to integrate technology ease-out your product experience and enhance your reach. See any technology for that matter, it usually doesn’t gain success and acceptance overnight and might need some time. So it’s about how we adopt technology and how we use it. We need to be very careful about our customers and target audience in terms of regulatory compliances, security and visibility.

How can digital payments platforms leverage tech to ensure data security?

Fundamentally, security and compliance have always been look at as the supporting elements of a company. But if you treat security and compliance as an engineering function, it will automatically enhance your security posture very drastically. This is because it it’s like a product by design including security and compliance factors in the design phase itself. When this is done, the final resultant product will be more compliant and acceptable by any government agency or mandate, and it will be beneficial to the users as well.

What opportunities do you foresee in the digital payments in the future?

Opportunities are massive in number for the digital payments in the coming days. It will not just help in making payments or other banking services more hassle-free, but also enable BFSIs to reach-out to rural and remote areas, thus bringing more population under the financial umbrella. Thus, digital payments are sure to play a major role in strengthening the finance ecosystem and in turn our economy by enhancing the reach of the basic financial services that every citizen requires. For this, every fintech just ensure to design their product in such a way that all these factors are included in the end product.