Page 35 - Banking Finance March 2021

ARTICLE

and all the transaction information is encrypted and The Future:
tokenized.
India is witnessing a growth trajectory in digital payments.
In fact, India is expected to be the growth engine by 2025
Another turning point came in 2016 with the launch of UPI - and according to stats, a $1 trillion digital market is
Unified Payment Interface, by the Govt of India and NPCI. It expected by 2025 in India. Cashless push have propelled the
was a smooth and quick transition for UPI to gain adoption growth of digital payments to stratospheric levels. Gone are
by the people. UPI transactions saw a growing increase year
the days when banks had the monopoly on transaction
after year. Identifying its utility and ease of transaction,
services. With the emergence of new fintech companies and
payment gateways did not take much time to integrate UPI
payment banks, the landscape would be far more vibrant.
in their system and offered it as an additional payment option
Today telecom companies, banks, mobile wallet firms and
to customers. It was this time that payment gateways payment banks are vying with each other for customers and
flourished and its utility found widespread acceptance.
a greater share of the financial market.
Payment System Indicators Financial technology, often shortened to fintechis an
emerging industry that is harvesting technology and
1600000 innovation to improve activities in finance. Fintech
1400000
(Rs. in billion) 1200000 that would be resulting in greater economic activity and
entrepreneurs are eliminating barriers to payments, and
1000000
800000
new wealth. Digital-savvy consumers are looking forward to
600000
400000
200000
to-peer networks. Fintech companies are offering electronic
0 innovations like Bitcoin, blockchain, tokenization and peer-
RTGS NEFT CTS payment systems and alternatives which e-Commerce
2016-17 981904 120040 74035 companies can easily incorporate into their sites.
2017-18 1167125 172229 79451
This futuristic business model would enable users to store a
2018-19 1356882 227936 81536 portion of their fiat money in digital form and make
Annual Turnover purchases and payments. Fintech entrepreneurs would be
more attuned with the higher expectations of a younger,
2016-17 2017-18 2018-19 digital-savvy generation who buy goods with a tap of a
phone screen. Frictionless systems like distributed ledgers
Payment Indicators are eliminating barriers to cross-border payments,
remittances and data transfers by being real-time, cheap
1800000 and secure.
(Rs. in billion) 1600000 These efficient transactions would unlock greater economic
1400000
1200000
1000000
800000
activity in the future and would promote prosperity.
600000
400000
200000
innovative solutions in the payments industry that would let
0
CR. DR. Entrepreneurs are designing newer processes and building
IMPS UPI banks and consumers into new era. Millennials are having a
CARDS CARDS
different mindset than the previous generations. The
2016-17 4116 69 3284 3299
modern culture embraces instant gratification and
2017-18 8925 1098 4590 4601 immediacy. As e-commerce industry would grow, the
2018-19 15903 8770 6033 5935 payments industry will see more innovations regarding
Annual Turnover checkouts and customers would be provided with more
ease.
2016-17 2017-18 2018-19
The future would see an increase in "invisible payments".
(Source: RBI Annual Report) Invisible payments as the name suggest would include more

BANKING FINANCE | MARCH | 2021 | 35