Digital Payments: The Way Ahead

Millennials’ inclination towards e-commerce has magnified the impact

- Aparajita Gupta

Digital payments became the buzzword during the demonetisation period of November-December 2016. But the speed of adoption lost its steam with cash coming back into the system. Nevertheless, people in urban India are still embracing digital mode of payments with every passing day, whereas the adoption rate is slower in the rural part.

According to a recent report by EY, emerging markets are leading the way. In both China and India, the adoption rate is 87 per cent. Close behind are Russia and South Africa, both with 82 per cent adoption. In both India and Russia, 99.5 per cent of consumers are aware that there are fintech services available to transfer money and make payments. The elevated awareness in India stems partly from the government’s plan, announced in 2017, to decrease the amount of paper currency in circulation. The spurt in digital payments in India is also fuelled by the burgeoining millennial population.

Indian millennials’ natural inclination towards e-commerce has magnified the impact of the government initiative. From paying the local kiranawallah to paying their monthly rentals, the younger generation today prefer digital payments across a wide spectrum of their uses and have given up on that constant of yesteryears, cash, says Bipin Preet Singh, Founder and CEO, MobiKwik.

“Fintech innovation has facilitated faster acceptance in not only Tier I cities, but also in the unlettered rural regions. Innovations have also helped various consumer brands and merchants, small and big, in expanding footprints across regions. Digital payments have also offered macro advantages to companies, improving cost efficiency, reach, scalability, agility and faster delivery of products,” he further adds.