Trends to Watch Out For In ‘The Payment Industry’ in 2016

Every year, we come across new trends and technologies making inroads into our lives while existing trends and technologies grow further and see higher adoption. A good example in this case is the growth in adoption of internet. As of 2015, India has the third largest base of internet subscribers. According to a report by KPMG and Internet and Mobile Marketing Association of India (IAMAI), the internet user base in India stood at 200 million in 2013, which is expected to grow to 500 million by 2017. A chuck as large as 314 million out of these are expected to be mobile internet subscribers.

The increase in penetration of internet enabled smartphones has changed the way one lives life. With technology comes convenience, which is now available at ones fingertips. Be it from shopping, buying flight tickets, booking cabs, hotels, movie tickets or banking. Gone are the days when a customer needed to visit a bank to transfer money, or visit a shop to make payments.

These internet enabled mobile devices also have a rippling effect on many other industries, giving birth to companies in new verticals such as e-commerce and payments industry. Traditionally, at a regular retail store, customers would use liquid cash to make payments. With improvements in payment regulations by the RBI, big data analytics, secure payment modes and the growth in consumer confidence - has led traditional payments, now being replaced by digital payments and m-wallets.

In the above context, let us look at some of the key trends for the payment industry in 2016

1. M-Wallets will rule: Increased use of mobile wallets will provide seamless customer experience at point of interaction
2. Digital currency will ruffle the remittance industry: Penetration of Digital Currency as main-stream payment instrument will test the regulatory waters across globe but will gain traction
3. Payments banks thrive amongst the unbanked and the under-banked: The mobile phone will become the virtual ATM and small-payments cheque-book for customer accounts.
4. Predictive Analytics will drive loyalty and reward programs: Customer data and analytics will drive payment companies to support increasingly sophisticated retailer funded rewards program
5. Start-up community will force banks to innovate: It is estimated that there are a few thousand start-ups in India focused exclusively on the FinTech space and there are many VC funding programs willing to bet on them
6. Technology Companies make inroads into banking and payment services: Technology companies like Apple, Facebook, Google will embed payment services in their overall customer experience
7. Security to become primary technology driver: Biometric authentication and tokenization will make security in NFC transactions far superior to any other method

Commenting on the trends outlined for the payments industry for 2016, Mr. Anand Ramakrishnan, CEO, Opus Consulting Solutions said “The year 2015 was a breakthrough year for the payments industry in India as we saw a rise in the adoption of digital payments and m-wallet. The trends outlined by Opus Consulting Solutions for 2016 highlights the direction in which the payments industry is headed, with a significant focus on FinTech innovation, especially by the startup community. We will also see further improvement in data analytics and security which will win the confidence of untapped consumer base, resulting in higher adoption of digital payment services in 2016.”