India’s e-commerce industry is the fastest growing sector and is expected to breach $100 billion mark by the end of the year 2020. The rapidly growing sector has further led to the emergence of payment banking opening up numerous possibilities for e-commerce marketplaces and e-retailers. Online businesses now have a unique payments mix to offer to their customers. Online payment today is no more limited to debit/credit cards or net banking. Mobile wallets are also being increasingly used by tech-savvy consumers to pay their bills & purchases. A large number of e-commerce portals have adopted this trend for quick & easy cashless payments.
Looking at the current trends of payments mechanism in India, the RBI & National Payments Corporation of India (NPCI) has launched Unified Payments Interface. This unique payments mechanism will be a boon for e-commerce companies which endeavor to provide a seamless shopping experience to their B2B and B2C customers. The interface utilizes smartphone as a payment device, Aadhar ID, Mobile number & Account number as unique identifiers of the person/entity. UPI is supposed to take payments to the next level wherein the customer’s mobile phone will be used for both collecting payments & sending them. Electronic payments process will become much more secure, convenient and faster both for the consumer & the service provider.
Mobile wallet is a digital version of physical wallet that is used for making payments, money transfer activities etc. UPI on the other hand is a new technology structure which can be integrated with existing banking apps so as to ensure smooth funds transfer and financial transactions between people in a safe manner. At present, COD is one of the most popular & utilized methods of payment in this sector. UPI will surely change that for e-commerce players since this payment mechanism works 24X7. Aadhaar is the main supporting structure for UPI and includes two services- AEPS (Aadhaar Enabled Payments System) and APB (Aadhaar Payments Bridge). The AEPS enables Aadhaar the use of biometric information for payment authentication from the bank accounts of customers linked to it. In the long run, companies may do away with card reader POS terminals with fingerprint readers for billing purpose.
Making payments will be as smooth & easy as swiping your phone to book a cab. It will simplify online transactions and is bound to win customers confidence as far as cashless virtual payments are concerned. Online payments through debit/credit card will no more remain a hassle with more & more banks and companies adopting UPI and registering themselves with a unique identifier. The system will replace mobile wallets and verify instant payment requests on phones. Therefore, customers will be easily able to make direct payments for industrial goods online without having to deal with the hassles of net banking or credit cards.
The right payments mix will allow companies to achieve higher conversions and customers with numerous benefits of ordering and paying for products online instantly. E-commerce portals brainstorm to provide a clever set of payment options to its customers to achieve higher conversions and maximize instant payments from the buyer. With the integration of UPI payment landscape for an e-commerce company will change in a unique way and will allow them to receive and refund payments instantly. Thus, an interested visitor can be easily converted into a potential buyer thereby offering an opportunity for online product marketplaces to grow exponentially through leveraging this new technology based payments interface.