A Digital Evolution Guided by Customer-Centricity and Technology

Gone are the days when companies used to design products and solutions en masse with a belief in the concept of “One Size Fits All”. Today customer segmentation is highly granular, and their demand is very specific and unique, which calls for custom-made offerings based on their needs. Countries, particularly developing nations, are witnessing an increase in the share of the younger population who are not afraid of experimenting and adopting new technology which can bring a higher level of ease and convenience in their lives.

According to World Payments Report 2023 by Capgemini, non-cash transaction volumes are expected to reach about 2.3 trillion by 2027, which would be almost double that of 2022. This exponential growth will be driven by the expansion of instant payment infrastructure in major markets, ongoing adoption of open banking frameworks, evolving customer expectations, regulations, and industry initiatives. These are catalysing the fast adoption of new instruments and instant payments. While cash remains an important payment instrument around the world, alongside digital alternatives, however, despite its near-term convenience, global use of cash continued to dip during 2022, the report said.

Digital Payment Revolution

It is to be noted that the spurt in digital transactions and digital-based ecosystem has been made possible due to a series of measures undertaken by regulatory institutions and central banks of various countries globally.

The central banks across various countries have been designing policies to build cashless economies even while ensuring that a safe, secure and robust payment system is put in place to provide much-needed ease to consumers without compromising on safety. The key triggers driving reforms across the global landscape of payment systems include customer behaviour and expectations, technological innovation, the emergence of non-banking and fintech players, financial inclusion and the need for better payment instruments and settlement services.

In India, the digital payment ecosystem leapfrogged after the demonetisation policy announced by the central government. The Covid-19-induced lockdown further strengthened the case for adopting digital payment mechanisms leading to a surge in the number of transactions. The foundation for the country’s digital payment revolution was laid with the establishment of the National Payments Corporation of India (NPCI) by the Reserve Bank of India in 2008. In 2016, NPCI introduced the Unified Payment Interface (UPI), an interoperable payments system that powers direct and instant settlement across multiple bank accounts for consumer-to-consumer (C2C) and consumer-to-business (C2B) transactions.

Finally, in 2021, India unveiled the account aggregator framework for consent-based encrypted data sharing for consumers and businesses. Multiple open APIs followed.

— The writer is the Founder of Airpay