The Foreseeable Growth Of Contactless Payments In 2021
2020 was all about the covid pandemic, wherein many businesses offline shifted online. Some payments were made through cash, however, because of the fear of the spread of the novel coronavirus, most people made their payments through digital payment options. This made fintech products become more customer-centric and gain high importance than ever before. From top-ranked businesses to local firms, all relied on fintech and their affluent payment solutions for facilitating fast transactions.
Now, when there is mass vaccination rolled, and limitation to the virus spreading, will there be a decrease in the dependency of contactless payments? Experts suggest that 2021 will be a year with tidal changes, creating a stronger platform for fintech.
Reserve Bank Announcements
From January 2021, Reserve Bank of India decided to increase the limits of contactless credit card payments and e-mandates for recurring transactions made via cards and UPI from Rs. 2000 to Rs. 5000. Thanks to the RBI decision, which is welcomed by banks and fintech, the RBI announcement potents of boosting the average value of transactions and give a push to India’s economy ahead of becoming a less-cash economy. The RBI decision will allow cardholders to proceed with secured contactless transactions of the maximum of Rs. 5000. This will also be boosting the UPI AutoPay technology for end-users without any hassles for payments of utility bills, investments, two-wheeler EMIs, consumer durable EMIs, and more.
The advancement in payment innovation between fintech and successful financial institutions has given emergence to the widescale adoption of digital payments
FASTag Toll Payment
One of the biggest markets for payment fintech is travel and tourism. And when there is a restriction in travel, which includes payment mediums, different e-wallets will gain dominance, and wallet cards will be made mandatory. FASTag is an electronic toll collection system which is operated by the National Highway Authority of India. The technology involved includes Radio Frequency Identification (RFID) technology for completing toll transactions directly from the prepaid or savings account. The payment is then made to the toll owner. The payment confirmation is affixed on the windscreen of the vehicles which permits the vehicles to pass the toll plazas without stopping for transactions.
WhatsApp Pay Feature
One of the most popular messaging platforms, WhatsApp, which in recent times is owned by Facebook, recently declared that its new payments feature WhatsApp Pay is live. The payments feature is additionally supported by State Bank of India, HDFC Bank, ICICI Bank, and Axis Bank through UPI for its users of 20 million in number in India. This feature by WhatsApp makes the digital payment section more competitive. WhatsApp rolled out its payments services in 10 Indian regional languages. It allows users to transfer money in a manner corresponding to sending messages.
Now, according to stats present online by renowned analysts, Bank for International Settlements (BIS) digital transactions in India is projected to reach US $160,660m in 2021, where the total transaction is valued to explicate an annual growth rate (CAGR 2021-2025) of 13.6 percent which will result in a projected total amount of US $267,355m by 2025.
The advancement in payment innovation between fintech and successful financial institutions has given emergence to the widescale adoption of digital payments. Digital Payments adoption by businesses augmented the requirement of a legacy payment infrastructure and quickly embracing a new and fast-paced way of sending money, payment settlements, information sharing, and new players in the fintech arena.
Therefore, 2021 is going to be an important year for growth in customer protection and data privacy which will be at the main gate and industry players for resolving new vulnerabilities by strong security.