Customer Experience and Confidence in Digital Payments

Dr. N. Rajendran – Chief Technology Officer, NPCI

Our country is riding on a new wave of digitized services and payments, signifying a transformational process deep seated within the way transactions are carried out by individuals and enterprises in India. According to the report by Google – Boston Consulting Group, the size of digital payments industry in India will be $500 billion by 2020 - contributing 15% to India’s GDP. Also, non-cash contribution in the consumer payments segment will double to 40% by the same time. It is imperative for payment service providers and financial institutions to implement measures to improve the overall customer experience and their confidence in making transactions digitally.

A few areas to focus on while working towards building better customer experience can be defined as below:

1. Smart Phone Penetration – According to a recent report released by TRAI, India has crossed the one billion mark for mobile smartphone users. With the collective effort by the government and private telecom players, internet will be available to the remote corners of the nation and that is what will promote the use of digital banking gradually. With greater internet availability, there will come better digital literacy which will prompt new users to move to digital payments.

2. Tokenization – A system that replaces sensitive data with unique symbols for identification is already revolutionizing the payments system be it via digital wallets, internet banking or payment gateways. It has immense applicability in the contactless payment applications and secures user information for instant transactions.

3. Mobile wallets and Apps – Inexpensive mobile payment options has changed the way banking has been perceived so far. With almost every Indian bank offering its services through digital applications and considering the push to reduce transaction charges to boost payments made digitally, inexpensive mechanisms like integrating UPI on an already existing app will open up more avenues to make fast, authentic payments. Mechanisms such as QR code authentication (Bharat QR) and Contactless Mobility Cards will spearhead the digitization in India.

4. Infrastructure resilience – Banks, merchants and e-commerce players realized the importance of building a secure, safe and resilient technology infrastructure in promoting customer confidence. It is this virtue of consumer behavior which will come to become the greatest driving force of digital adoption. From shopping online, the customer has come a long way in a short span of time to use UPI for P2A/P2P transactions. Greater security measures and integration of robust technology platforms will essentially drive customer confidence in relying upon digital payment services.

The customer is now opening up to new forms of digital payments be it internet banking or P2P transactions through a mobile app using just one unique code or a unique Virtual Payment Address (VPA). Accessing payment information and services using one unique ID such as Aadhaar truly enables every Indian to shift to this transformational phenomenon of digitization.

Proliferation of accessible hacking methods and easier ways of tapping into user data have increased the risks involved in digitization of payments, but it cannot bring down the overwhelming interest to enable digitization in every sphere of business, education, communication and lifestyle. With improved security protocols and implementation of failsafe methods of user authentication such as biometric authentication, digital payments will pave the way for building a truly digital economy.