Overview of the Payment Methodologies
In 2018, digitization has changed the way people deal with money and more. The digital wallet market has shown remarkable growth and improvement in the ways people of their finances. According to the latest Consumer Payments Insight Survey, Indian market is the top most in terms of mobile wallet adoption covering about 55.4% of the people having an e-wallet and using it extensively. India is being followed by China and Denmark in line. While the IT & mobile revolutions march head-on, mobile digitization is also to the fore nowadays.
The absorption level of the digital wallet is much higher in our country compared to other developed or semi-developed countries, where cash anyway isn’t used much. Mobile wallet transactions have grown triple folds in the last 5 years, from Rs.24 billion in 2013 to Rs.955 billion in 2017, and will cross 1 trillion in early 2018.
How Government involvement enabled digitization?
The high rising wallet market is triggered by the change in the government policies to promote digital payments, coupled with rising smartphone penetration and improved telecom and payment infrastructure.
The demonetization drive in November 2016 was a sure shot hit amongst people. It had resulted in a massive cash-crunch in the country with money getting dried up, directing people to switch to electronic modes per se. People were happy to experiment with mobile/digital channels for low value, day to day transactions.
The total value of digital wallet transactions grew 1.5 times during the last two years. Not considered relevant, these ecommerce channels are now well-accepted to make instant payments at shops, departmental stores, street side vendors, fuel locations, cab drivers etc.
Digital wallets have become too routine in the world of online payments. The share of physical payments is deteriorating significantly from 38% to 32% in the phase of digital payments. A recent survey reported that the mobile wallet share jumped from just 7% to 29% during the same period.
Digitization is important in every area of work and is a widely used medium to reach a larger portion of people around. The digital world has helped the financial sector a lot in knowing their customers better and cater righteously. It is digitization only that helps banks and NBFCs a lot in safe lending.
Each and every online transaction gets recorded somewhere and helps banks to identify the customer and his dealings. Transactions like online payments, credit card use, credit limit threshold, utility payments etc. Every bit of your online history builds your credibility. This also gauges your money credibility. Any loan provider critically analyses your past history before giving out any credits, here the online record does wonders. Your payment record authenticates your journey.