On November 24th, Accenture, the renowned consulting firm, released a report, which stated that in India, 66 billion transactions worth close to $270 billion should shift from cash to cards and digital payments by 2023. The rising popularity of cashless transactions has put pressure on banks, increasing the urgency to modernize their payment systems. Banks could not predict the rapid pace of this trend and are trying to embrace the changing consumer dynamic.
Now, after a two-and-a-half-year wait, a new digital payment option has entered the country, which will play a role in the realization of the mentioned projections. In February of 2018, WhatsApp, Facebook’s freeware messaging service, attained approval to begin testing its payment feature in India. Then, it was only available in a beta version, taking advantage of the Unified Payments Interface. It gained support from numerous Indian banks, such as the State Bank of India, HDFC Bank, ICICI Bank, and Axis Bank.
On November 5th, the National Payments Corporation of India finally allowed WhatsApp payments to go live. However, it did so by placing a 20 million user-cap, which will likely increase at a later date. The event marked Facebook’s entry into the world’s second-largest internet market. It now joins competitors such as Google Pay, Amazon Pay, Paytm, PhonePe, and others. The growth in the fintech sector comes from a series of innovations that happened over the last decade.
Users Prefer App Payments for Online Lotteries and Sports Betting
The rise of cashless payment methods coincided with the surge of internet betting and its widespread adoption. Estimates say that the sphere will hit annual revenues of $93 billion in 2023, which is an increase of almost $27 billion in the next three years. More and more players are choosing to play the Indian lottery online, to spin reels on websites, and place wagers with internet bookies.
A recent survey showed that over 40% of Indian internet users like to gamble, and the majority of players prefer to place wagers on sporting events. Since there are no laws that regulate online betting, the legal principle that whatever is not forbidden is allowed applies. Thus, many enjoy these activities at offshore sites that accept Indian players, who lay down wagers on cricket matches, or purchase tickets for both online and international lotteries. Most do so via digital payments on account of their convenience and transfer speeds.
Increased Security Drives the Appeal of Digital Payment Methods.
Though transferring money over the internet was thought of as a dangerous activity twenty years ago, today, it’s not only normal, it’s safer than other options. Multi-factor authentication makes hacking almost impossible by adding layers of security that safeguard user data.
Biometric identification is a security measure that utilizes biometric features to verify user identity before allowing access to apps or devices. Authentication can involve a fingerprint scan, iris or facial recognition, heartbeat analysis, and vein mapping to prevent fraud. Google Pay and Amazon Pay both utilize fingerprint and facial recognition and are looking to implement new options soon. Industry data suggest that in a year, the number of annual biometric transactions will reach 18 billion.
Top digital payment providers, like Apple and Google, use a technology called tokenization in their mobile wallets. When a user makes a payment, his data gets encrypted with random symbols, referred to as tokens. These are then sent to the merchant to process, instead of the user’s card number. The method minimizes the risk of a data breach since the merchant only stores tokens and not the user’s actual payment details.