Today, an increasing number of people are going digital by using less of cash, making an interest and creating a demand for alternative payment methods and opening a world of potential for advancement of Fintech. As payment solution providers endeavour to be in front of the move, and as a rule push the cashless motivation, they will be additionally confronted with consumers requesting developments that are in tune with their way to living. Be that as it may, adapting to better meet the needs of an increasingly cashless society won’t occur incidentally – so by what method will the financial services industry realistically conquer any hindrance among today and the cashless future not too far off?
Among the payment innovations helping them do as such are convenient mobile wallets, frictionless dual-interface cards multi-use point of sale (POS) systems and Aadhaar framework.
Driver 1: Mobile Wallets- Money on mobile
Digital payment methods makes the business world go round by making it less dependent on cash for transactions. Mobile wallet technologies, a major component of digital payment methods, are being increasingly used day to day, from small stores to government sectors, attributed to a number of factors including the decline of cash which has created a demand for more convenient alternatives of payments to replace traditional paper currency. In the past, mobile wallets were predominantly used for P2P payments, but that has changed with the introduction of POS machines that help create a tech-driven, multi-faceted use-case for mobile wallets that can be much appreciated as less consumers use cash.
Mobile wallets enable consumers to quickly send and receive payments with a few taps or clicks on a smartphone.
Other non-cash users can reap the benefits of similar digital services, such as Samsung Pay or Google Pay, which is conveniently compatible with physical bank cards. The mobile app allows friends, family members and colleagues to send and receive money via their smartphones quickly and easily.
Driver 2: Dual Interface Cards
Another interlacing pattern supporting the decrease in usage of cash is the shift towards contactless payments. Unsurprisingly, millennials are real defenders of contactless, with about on out of five anticipating a cashless society in the future where paper currency is no longer used. So as to stay aware of the cashless motivation and meet the consumer (and particularly millennial) demand for fast, frictionless payments methods, financial institutions are grasping dual interface payment cards. Dual interface cards are readied with an embedded chip to empower both contact transactions (inserted or swiped at POS machines) and contactless transactions (waved at POS machines).
As native adopters of payments innovations, the abhorrence to cash among youth could conceivably fill in as a noteworthy driver of the broad utilization of double interface cards that is currently stretching out to the two finishes of the generational spectrum. Boomers and Gen- Z are progressively being moulded by the ubiquitous technologies around them and now anticipate a fast, frictionless involvement at the point of sale – with dual interface cards offering a desirable leap from blundering for spare change and bills.
The usability convenience and speed managed by dual interface cards makes the payment framework well positioned to take control over small rupee transactions – which is one of the key factors that will drive the rising cashless pattern in consumer payments. Contactless transactions by means of debit and credit cards are expected to surpass $2 trillion globally by 2021.
Driver 3: Point of Sale Systems
Prior to the demonetization, India was vigorously dependent on cash transactions. Approximately 95 percent of all transactions were made using cash until 2016, and 90 percent of merchants did not have an EDC machine or POS machine to acknowledge bank card or digital payments.
As companies in financial services keep on pushing the cashless plan through advancements in mobile wallets and dual interface cards, it’s apparent that merchants should accommodate alongside their customers. Today, the average consumer utilises plastic money for 28 percent of their total purchases, implying that businesses relying exclusively on cash to accept payments are leaving money on the table. As an immediate after effect of this move, the market for POS machines is relied upon to grow by 11.5 percent by 2025.
With the introduction of new POS technologies, businesses of all sorts and sizes – from a neighbourhood kirana store to a nearby fine-dine restaurants– can adapt to the cashless society. POS machine and software providers are critical contributors of the push towards cashless, empowering businesses of every kind imaginable to acknowledge not only plastic money, but also mobile, digital and other contactless formats that keep on developing in prominence.
Developing solutions in this field can transform conventional smartphones and tablets into POS systems, utilised by independent businesses around the globe, enabling them to accept payments via magstripe, chip & contactless cards and mobile & digital payments to meet the payment inclination of the customer.
Driver 4: Aadhaar System
India is also home to a large rural population, a group that often falls into the un-banked category. Digital banking framework often doesn’t stretch out to its geographic territory, which means this population’s very scope could keep paper currency in play for quite a long period of time. The country’s rural inhabitants are also less trusting on the digital payment system, and news of hacks and data breaches can further grinds down their already low confidence in digital payments framework. This results in the rural residents returning to cash.
Also, the residents in rural areas are often comparatively slower to adopt and embrace newer payment methods like mobile wallets, unlike those in more populated metro regions. Biometric solutions could go far toward guaranteeing rural natives that their data is completely secure. In this way, Indian banks are currently throwing light on how iris scanner or fingerprint scanners can help in validating electronic payments utilizing the Aadhaar framework.
With cash vanishing from wallets, the payments landscape has seen a relentless tornado of transformation, hinting at no signs of subsiding. As financial institutions, merchants and others explore this progress with an end goal to more readily serve their clients, solutions from payments technology providers are helping ensure the evolution occurs smoothly.