The payment solutions landscape in 2015

The Indian payment landscape underwent a rapid change over the past few years. What has changed is how customers like to pay and what value they are looking at for each transaction. Offline retail has to actively compete with the choices online retail provides to the customers.

These are challenging and competitive times for businesses. They constantly need to do more to grow and match up with new-age customers’ payment needs. This  need of modern retail to give more choice and value to their customers has led to the growth of payment solution providers.

Today, businesses’ need for payment acceptance has moved way beyond just cash or card payment acceptance. To give an edge to their business, they need to offer payment options like pay with a mobile wallet or gift cards or loyalty points or reward points or pay in EMIs.

Modern retain needs a single platform to seamlessly accept all payment modes while creating value like affordability and convenience for its customers. This is an evolution payment solutions went through where it moved from payment acceptance provider to payment partner, which facilitates a business edge to its merchants by customer engagement and acquisition.

The consumption through payment modes has seen an upsurge across all metros. Paying through card EMIs or with reward points accrued on various cards is becoming a hygiene payment behaviour in not only in leading metros like Bangalore, Delhi and Mumbai, but smaller cities like Pune and Chandigarh are also fast catching up.

The innovation that saw very quick and keen acceptance across industry was real-time acceptance of reward points as a payment mode for goods and services purchased by participating partner cards (Amex, Axis Edge, Pay Back, Loyalty Rewards etc.) The process of redemption for card holders, which otherwise was a tedious and time-consuming process through catalogues, has now been made easy and convenient by facilitating use of reward points instantly at the POS.

One of the biggest innovations is to get the Point of Sale (PoS) to act as an a Micro ATM for cash withdrawal as well as to support card transactions in remote villages in India. With the direct benefit transfers, the banking population has increased, but they don’t have access to the banking infrastructure. Enabling cash at POS actually enables our government to work towards its financial inclusion goal.

Mobile wallets grew big this year, but the acceptance was limited to online payments only. The innovation that enables acceptance of mobile wallets on offline stores like Big Bazaar on specific payment platforms has expanded the reach of mobile wallet customers of leading wallets like Mobikwik, Oxigen etc. Another big innovation this year was access to digital content like Google Play or iTunes through PoS.

The way forward is for innovations to constantly match up to the payment modes that the new-age customers are adopting and also to create business opportunities for the merchants to connect with new and existing customers. Payment solutions have to be partners in growth, not just payment acceptance providers.