The unprecedented outbreak of Covid-19 has affected economies all across the globe. Industries across verticals have suffered the shock due to lockdown and social distancing measures in place. As the consumers shun cash, the notion of payments is redefined and re-examined keeping in view the spread of novel coronavirus. The consumer is now more inclined to leapfrog over traditional payment solutions. Majority are of the opinion that digital payment is sine qua non of day-to-day business transactions that must be pressed forward, especially in times of crisis such as these.
On the other hand, it is high time that the businesses must now reevaluate their stand on digital payment systems like POS machines and accept them to give to their customers a hassle-free and safe payment making experience. Those businesses that embrace the change, however acquiescingly, will navigate through most catastrophes and reap rewards in the longer run.
Digital Payment Revolution In India Before Covid-19
Over the last decade or so, India saw a heightened interest and activity in the digital payment landscape, partly due to the digitization push by the present government, the mobile and internet penetration and advanced innovations in the digital payment technology. The rise of digital payment was inevitable given the billion-plus population and millions of SMEs, retailers, and other businesses in India.
Even before the Covid-19 induced changes, retails and consumers were gradually shifting to digital. With POS machines, transactions became faster and the checkout line became shorter for the consumer. For retailers, it simplified business. With mPOS coming up, it gave flexibility and mobility. Its features like inventory management, billing and order processing, sending invoices to customers through SMS, analytics, customer relationship and experience benefited the merchants.
In a recent report, it was revealed that the total number of POS terminals used by merchant acquiring banks have reached a milestone figure of 5 million in the January-March quarter. By the end of March, there were 5.13 million POS terminals in the country. While the private sector banks represent about 69 percent of the POS terminal market, public sector banks make up for the remaining 27 percent.
Covid-19 Accelerates the Digital Push
The impact of Covid-19 has accelerated the need for digital payment alternatives like swiping machines and POS terminals for safe transaction by consumers. This is essential while the country is trying to control the spread of the virus. The consumer is increasingly wary of the spread of the virus and anxious about other health problems, lest they might have to visit a doctor.
A RBI report found that customers, since the time of being under lockdown, have preferred the ‘Point of Sale’, or as they are more widely known, the POS terminals over ATMs. The cash withdrawal volumes at POS terminals grew by 21%, which amounts to an increase of 4.8 million in April from 3.3 million in March. The statistics show that people are geared up and eager to switch to the safer digital mode of payments.
The Reserve Bank Of India as well as the National Payment Corporation of India (NPCI) has voiced their support for the digital payments and POS machines too. Mr. Shaktikanta Das, the current RBI governor, has advocated for contactless payments in particular. The Reserve Bank of India has also allowed tap-and-go functionality on card payments for all purchases, even above Rs 2000 with a PIN, at retail stores and shopping centres. On the same note, the NPCI has released a circular urging Indians to use digital payments, advocating robust digital payment infrastructure to support all the stakeholders.
This compelled transformation has pushed the ever hesitant SMEs and merchants to eventually opt for cashless and contactless payment systems. In a nutshell, digital payment system has found a wider acceptance.
Amitabh Kant, the chief executive of NITI Aayog, at a CII’s Fintech and Digitization seminar, recently said that, “India is targeting one billion digital transactions per day in a push towards bringing more people under the ambit of such modes of payments. From three billion transactions in a month we are targeting a billion transactions per day and we are pushing for it.”
The wide spread support for digital transactions will further boost the use of POS machines and contactless payments. NFC based POS machines will further help in contactless payments. Then, there are the QR code based payment solutions too, which are quite popular today.
The sudden shift in the purchasing and paying behaviour of the customers, due to the Covid-19 situation, has led to a surging demand from businesses for technology and devices to make digital-only transactions available. Moreover, POS machines can be disinfected easily and other devices like NFC enabled POS machines makes them safe, to be used anywhere by anyone.
Merchants need to ramp up their digital payment capabilities and grab this opportunity to make a smooth transition into the digital world of payment. This will be their contribution to the fight against Coronavirus by using cashless and contactless digital payment devices and technology. Mswipe is one of the leaders and innovators in the digital payments market. A wide range of POS machines and contactless payment devices are available for the various business needs. Visit www.mswipe.com/ for complete details.