It’s difficult to imagine a world where money didn’t exist and goods and services were simply exchanged. The charms of the good old days are lost upon us, with the barter system clearing the way for the emergence of physical currency – in the shape of gold, coins, and later – paper checks. Plastic was soon to replace paper and we witnessed the emergence of debit and credit cards. Hither to, the payments landscape has quickly metamorphosed to encompass digital wallets, mobile payments and more.
The new normal: UPI-based digital payments
Remember when one couldn’t fathom leaving home without one’s wallet? Such a scenario is long past us, certain exceptions kept aside. From Kirana stores to high-end malls, cab hailing services, online food-ordering and even travel apps, UPI-enabled mobile payments are becoming the new normal, in this post-pandemic world.
Case in point, the rising scale and ubiquity of digital payments. From June, 2020 to June, 2021, the UPI-based payments have observed a stellar growth of 109% in value and 110% in volume, as per EY data. Furthermore, with the pandemic being a catalyst to the already growing e-commerce transactions, UPI-based payments emerged as one of the most preferred means for online transactions. In fact, digital wallets made up for 39.7% of e-commerce payments in India, as per a joint report by research firms Worldpay and FIS.
Confluence of several factors make digital payments the new normal. This includes the increasing ease of use over cash transactions – bid adieus to scavenging for change, the growing internet penetration, growth of the e-commerce and more.
How WhatsApp Payments can be a game-changer
Digital payments space in India, which is already crowded with homegrown startups and international players alike, witnessed the entry of another strong global player, WhatsApp Payments. Given the sheer ubiquity of the platform, WhatsApp’s foray into the digital payments landscape could potentially be a game-changer. WhatsApp’s 400 million-plus user base, India could see a significant increase in digital payments. Digital payment usage is soaring in urban areas across the country. Digital payments in rural India will be encouraged by the growing use of WhatsApp in these areas. While every other mobile user is on WhatsApp, bringing in the ease of money transfer while chatting, without even having to skip the window, completely elevates the convenience factor. In fact, the simple chatting feature is the edge that WhatsApp Payment has over its competitors that seldom extend an interactive feature.
Furthermore, following their association, Reliance Jio is helping Meta (previously Facebook) grow its WhatsApp payments in India. Jio recently hinted at WhatsApp Payments being heavily included in the ecosystem of services and offerings that it plans on creating. Furthermore, Reliance may integrate Jio Mart shopping app in WhatsApp. Given the sheer size and reach of these behemoths, every merchant, e-commerce platform, and other stakeholders in the payments landscape must look into leveraging WhatsApp Payments.
What it means for the merchants?
Google Pay two to three years to reach 70 million people in this country. As a result of WhatsApp’s large user base, it has a significant advantage over the competition in this market. In the coming years, the digital payment ecosystem will see an increase in the number of partnerships formed. In rural areas where digital payment adoption is low, we will see vendors aggressively promoting digital payments. Vendors will also do a lot of work to enhance security and the customer experience. In the presence of so many options, it is crucial more than ever for merchants and e-commerce platforms to not get overwhelmed. The ease of interaction made available by WhatsApp Payments is certainly a feature worth exploring, especially if the brand is relying on social selling.
The need of the hour, however, is to closely observe the payment space and be in touch with the customers. Merchants and e-commerce platforms should understand the customer journeys and integrate features that will elevate the overall customer experience.
(The writer is Founder, FidyPay)
Download The Economic Times News App to get Daily Market Updates & Live Business News.