Innovations can be defined as a creative idea or alternative method of doing anything. Modern innovations in digital technology for making payments are transforming India into a cashless economy. According to NASSCOM, the Indian FinTech market is trying to reach 2.2 billion by 2020 from the current 1.2 billion. Aadhar card represents a unique innovation of India in the digital economy. India is leapfrogging in payments innovation for reaching the cashless economy.
Best Digital Payments Innovative methods – OwnMoney
AI (Artificial intelligence): Artificial intelligence helps in understanding consumer behavior better at an increased level. In fact, every day million such card transactions are happening in the financial sector. To understand and interact with key customers’ big data and machine learning (e.g. smart chatbots, tailored offerings), which are also helping all banking and non-banking institutions to experience digital payments in a substantial way, formulate strategy and provide a more superior level of security.
M-Banking: According to VISA, payment through mobile devices is growing 53% faster than payments through a desktop. Innovations came into mobile banking through Unified Payments Interface (BHIM), Unstructured Supplementary Service Data (dialing *99# from a phone), internet banking (NEFT, RTGS, IMPS), mobile wallets (Paytm, Freecharge, Mobikwik, Vodafone m-pesa, Phone pe), etc. All these methods are some new features in the digital payments system.
Extensive payment system: There are typically various prevalent methods of digital payments like- banking card, USSD(Unstructured Supplementary Service Data), APES(Aadhaar Enabled Payment System), UPI(Unified Payments Interface), mobile wallet, PoS (Point of Sale), internet banking, mobile banking, micro ATM, active bank prepaid card, etc. For the practical convenience of the potential customer, they can use any of these methods. Government initiative and FinTech collaboration are inspiring companies to innovate new digital payment methods. These methods are paperless and innovative also.
P2P Transaction: Peer to peer transactions through an intermediary service with the help of a digital platform can create a revolution in investment and borrowings business. Paypal, Faircent, Lendbox, and Upstart, etc. remain the most popular start-up companies which are changing the map of lending in India.
Highlighting the favorable factors for innovation:
Technological developments: Cloud-based solution, Application programming interface (API), data modeling, big data, etc. are helping financial services companies to analyze data in a smarter way and giving a customer-centric solution.
Market Trends: Due to technological innovation, more and more people are using a smartphone in India. India is the 2nd largest in using mobile phones in the world. The economic growth rate of digital innovation in India is faster other parts of the world. For that, global players like Google, Whatsapp, and Facebook have launched their own payment system as Paypal did in history.
Industry change: New regulations like National Cyber Security Policy (2013), Watal Committee report by MoF (2016), Draft of Ministry of IT and Electronics (MeitY) – PPI Security rules (2017) are increasing the confidence of FinTech companies for innovating modern technology and methods. New liquidity and risk management systems are changing the national payment infrastructure of India.
After “Make in India” launch, a India saw a 2.59 billion investment in new FinTech start-up in the areas of artificial intelligence and analytics. The growth rate in the innovation of financial technology was 31% in the previous year. There are only 30 million income tax-payers in India, for this reason, the financial transformation is an illusion dream in India. Through these innovative digital payment methods, Government is trying valiantly to severely reduce tax evaders and radically transforming the Indian economy towards “cashless economy.”