Sirish Kumar

Sirish Kumar is the CEO and Co-Founder of Telr, the international e-payment gateway for businesses to easily and securely accept and manage online payments via web and mobile. A seasoned C-suite executive, Sirish is widely acknowledged as one of the most distinguished finance professionals in the industry having successfully set up and steered the growth of Middle East's fastest growing payments player.

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Innovations Warranted From Payment Gateways in 2017

With the Jan Dhan Yojana, the government is endeavoring to make financial and banking services available to all sections of the society.

The union budget 2017 declared the upper limit of 3 lakhs worth of cash-based transactions. The move is clearly going to work in the favor of payment gateways, in addition to the demonetization drive initiated year.

Now, for larger ticket sizes also , different players would  have to take the online route. Besides, the time is ripe for the payment gateways to innovate, disrupt the status quo and become a part and parcel of the lives of users.

 Here’s discussing the 4 key innovations the world requires from payment solutions providers:

Banking Collaborations

Only 5 banks control more than 90% share of e-commerce transactions in India. Why are not other banks focused on offering to their small and medium sized clients these e-payment solutions? They can partner with payment gateway players with full stack technology, with strong risk management and anti-fraud solutions and friendly merchant dashboard.

This will bring about a revolution of financial inclusion and disrupt the present day fragmented ecosystem. The partnerships would further work in the favor of small scale merchants, the ones that have been underserved for the longest of times and must be brought to mainstream attention, for the Indian economy to progress.

With the Dhan Jan Yojana, the government is endeavoring to make financial and banking services available to all sections of the society. While the scheme is covering a majority of erstwhile unbanked sections of the economy, more efforts and innovations are required to instill trust and scalability of acceptance of such services.

Improved Cyber-security

We know already how the vulnerabilities of credit cards offered by leading Indian banks, were exploited in October 2016. With the present day emphasis on digital and cashless transactions, the online world needs to be safeguarded more than ever before. We are looking at a majority of first-time users flocking down the internet space, which are naturally more vulnerable to phishing attacks, identity counterfeiting and other means of scam and manipulation.

To begin with, payment gateways need to run a thorough and fundamental security check. Whether it is PCI-DSS compliance, OTPs or venturing into innovative applications and platforms, payment gateways need to ensure that the transactions at their platform are completely secure and bullet-proof.

Secondly, payment gateways would have to invest and innovate for spreading merchant education, especially in the regards of cyber-security. Helping them in getting the basics of secure transactions right, and assisting them in becoming smarter against cyber-attacks are the key responsibility areas that the payment gateways must also make provisions for.  

Time for Merchant Focused Smartphone Applications

Mobile commerce has been steadily growing, especially when we take into context the emerging south-Asian markets. In India alone, the number of smartphone users is expected to reach 340.2 million before the conclusion of 2017.

Besides, owing to the Make in India initiative by the Indian government, various global brands have set up their manufacturing bases in India, further reducing the price of owning a smartphone. As it increasingly becomes easier for the users to own a smartphone, and with the smartphone wave headed for the rural India, in a lot many cases, these devices are accredited for delivering the first-ever internet experience to the users.  

Hence, at a time when mobile transactions are successfully opening newer opportunities for both, businesses and consumers, payment gateways need to further innovate and disrupt their mobile strategy. Perhaps they may have a SDK ready to be used by the merchants, allowing them to integrate multiple payment options in a mobile environment, without costing too much of investments in the form of effort or time.

Alternative to Point of Sale machines  

Payment gateway solutions should bring alternate to Point of sales machines for small stores. Post de-monetization, in less than 2 months, Indian banks and government bodies have placed order of more than 6 lakh machines, that will cost more than $150 M to small merchants and banks, apart from the monthly charges. Since only two manufacturers dominate this sector in the world and all these machines will need to be imported from China, this is not an economic and sustainable solution for India.

Payment gateways should typically work with the intention of making it easier for a heterogeneous mix of population to pay online. In the new era of digitalization and FinTech boom in India, various government bodies, such as NPCI, have been creating research labs within to roll out products that foster more inclusion of large sections of society in the transition from cash to cashless initiative of the government.  

In India today, we need to get the basics of the technology right. Unified Payment Interface (UPI) endeavors to give an alternative to existing e-wallet models. Building strong anti-fraud and risk management processes for authenticating e-payment transactions is critical for acceptance across larger segments of society.

Payment gateways today have an opportunity of making consumers on their platform utilize the standard apps and modes of digital payments, to complete the transactions. They help in collecting money for housing societies, cable operators, insurance companies, travel agents, hotels and educational institutions etc, without exchange of single currency note. Different payment solutions providers may assist in further improving the available technologies. Payment gateways should be encouraged to offer e-payment solutions to industries, government entities that still see high proportion of cash as mode of settling payments. Depending upon the buyer’s demographics and experience, she or he will like to have a choice to pay from credit cards, debit, cards, banks, ATMs and wallets. Interfaces like UPI will be key for mass adoption of cashless method of settling transactions between buyer and seller.

In essence, the role of payment gateways will continue to grow in leaps and bounds, as the Indian economy continue to go cashless. These structured improvements will definitely help assist Indian economy in reaching the next notch. As the different stakeholders in the ecosystem benefit from these innovations, we shall be able to manifest the dream of a cash-less, digitally abreast India.  

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house

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