We Are Evolving Our Products To Sustain The Drive Toward The Distribution Of Financial Services To The Underserved Segments Of The Economy: Reeju Datta, Co-Founder, Cashfree Payments

Our focus continues towards devising powerful solutions to enhance the technological capabilities of organisations and empower them to provide a top-notch customer experience.

Please elaborate on Cashfree’s distinctive product offerings.

The onset of the pandemic and the resulting conditions have led to an increased emphasis on innovation and effectiveness in the digital payments ecosystem. Businesses and other entities have realised the need for full-stack payments solutions that would enable them to collect payments and make payouts via every available method through a single, simple integration. At Cashfree Payments, we work very closely with our merchant partners to identify their pain points and develop disruptive solutions that enhance their business turnover. So far, we have launched six first-of-its-kind fintech innovations, including Payouts, Instant Refunds, Cashgram, Pre-Authorization, Subscriptions, and Instant Settlements. These solutions have been designed to help businesses automate payments while keeping their focus on improving their customers’ experiences. Most recently, we launched our first offering, ‘Accounts’ in the Banking as a Service (BaaS) segment, which enables neobanks, fintechs, and other internet platforms to open accounts, link accounts, accept deposits, make payouts, check balances, earn interest, and other financial services.

Currently, we process transactions worth USD 20 billion annually while enabling more than 1,00,000 businesses with payment collections, vendor payouts, wage payouts, bulk refunds, expense reimbursements, loyalty and rewards programmes, with more than 50% market share among payment processors.

Has COVID-19 changed the way you look at the digital payments ecosystem? 

According to the RBI, the volume of payments transactions has increased by 53% in the last year for digital payments. The five-year CAGR in terms of volume has been 42 percent, indicating that the last 12 months have seen significant growth when compared to the previous five years. With traditional, non-internet first businesses having to operate online at short notice, we observed a proliferation of no-code and low-code solutions such as payment links, payment forms, and bulk payouts via file uploads. We have seen a 161% growth, over the last two years, in merchant signups.

Some of the sectors that saw increased transaction volumes were e-commerce platforms, EdTechs, online gaming, recharges, and utility/bill payments. We have seen the changes in consumer behaviour from card swipes at POS to online QR Scan (or ePOS), which is accelerating the acceptability and accessibility of digital payments. It is now imperative for the digital payments ecosystem to evolve rapidly, to help the recovery and lead the emergence of the economy into this new normal, and help shape the post-COVID era.

What are you doing to adjust to the new normal?

The present circumstances have been characterised by an enhanced focus on data security. The Reserve Bank of India has recently issued guidelines around tokenization that mandate all authorised card networks — like VISA, Mastercard, RuPay, and American Express to issue tokens against card details for all transactions on a particular platform. For the user’s security benefit, the customer’s card details would be masked behind the token, and they would be able to transact through just that. We have been quick to adjust to this change by launching the Cashfree Payments' Token Vault services, soon after the RBI announcement. It enables merchants to save card network tokens effortlessly and stay compliant with RBI guidelines.

While offering a single solution for both, saving tokenized cards and processing payments using tokenized cards.

As the first digital payments platform in India to enable customer payment collection, refunds, and disbursals, Cashfree Payments has always been ahead of the curve in helping e-commerce stores, and online marketplaces grow their businesses. Our e-commerce suite has enabled businesses, such as Nykaa and Furlenco, among others, to tailor-make their own payment infrastructure as per their needs. This includes facilitating payment collection on websites, mobile apps, for retail ventures on social media (Facebook, Instagram, Twitter, WhatsApp) and other multi-seller platforms.

We also launched the PAN (Permanent Account Number) Verification feature on the Cashfree Payments Verification Suite as part of our effort to enable bulk KYC for businesses. The PAN verification feature allows merchants to do a single online PAN verification or bulk PAN verification of up to 10,000 PANs of their customers via a PAN verification API. This solution allowed merchants to check both PAN card details and PAN status online, reducing the need for in-person checks during the pandemic situation.

We are constantly evolving our product offerings to cater to the changing requirements of our customers and sustain the drive toward the distribution of financial services to the underserved segments of the economy.

With the economy opening up, how will Cashfree Payments’ role change?

Present dynamic circumstances have posed unique challenges and thereby provided distinctive opportunities to innovate. At Cashfree Payments, we are currently expanding our product offerings in international markets, having recently invested in a leading UAE and Saudi Arabia-based payment service provider, Telr. This has allowed Cashfree Payments’ merchants to accept payments from customers in the MENA region, even as we look to develop a unified cross-border payments platform with Telr. We will now look at introducing our instant payouts, subscription payments, and merchant payment verification for Telr’s customers in the Middle-East and North Africa (MENA) market. Over the next few years, we should be able to leverage this advantage to roll out new products in other emerging economies and find a leadership position by being the first mover.

Our distinctive cross border service, Global Payouts, is also in line with our increasing focus on the international market. Global Payouts was built to respond to skyrocketing cross-border e-commerce sales due to an increased demand for foreign goods and a rising middle class, particularly in Asia and the Middle East. It has connected companies across the globe with both businesses and individuals operating out of India.

Meanwhile, though a fairly well-known concept in the financial services industry, the actual realization, and adoption of the open-banking system increased after the outbreak of the COVID-19 pandemic. The fintech, or financial technology industry, today is constantly disrupting the financial services ecosystem. They are not only forcing banks to change their business operations but also bringing in automation to deliver a seamless customer experience. Opening banking is a perfect example of the ongoing disruption. It’s enabling banks to collaborate with fintech platforms to adopt open API technology and stay ahead of their peers. Meanwhile, it has been our endeavour to enable effective digital transformation of our customers' businesses via Cashfree Payments APIs, which are easy to integrate and help them scale up. Our low-code solutions allow businesses to customise the APIs according to their unique business needs, as well as help them build native solutions on top of our designed payment infrastructure. Furthermore, our no-code solutions and powerful dashboards assist businesses to digitise their payment collections, payouts, and banking as well as process transactions in bulk in minutes without the need to write code.

Our focus continues towards devising powerful solutions to enhance the technological capabilities of organisations and empower them to provide a top-notch customer experience.

How do the new auto-debit rules impact the payments ecosystem?

The RBI’s new auto-debit rules are aimed at safeguarding customers’ interests in terms of data security and the prevention of fraud in the payments ecosystem. It allows card users to manage and administer their recurring transactions with more control in the hands of customers, as they can set the amount, velocity, and other details of recurring mandates. There is no change to the recurring payments processed through UPI Autopay and e-NACH, since they have already been developed in accordance with these guidelines. Further, RBI is enforcing two-factor authentication (AFA) to boost customer safety. There are steps to improve customer convenience by increasing the threshold of transactions that don’t need a second factor to Rs 5000 (from Rs 2000) for contactless offline card transactions.

How will API banking drive the next revolution in the financial environment?

API Banking is helping to bring banking services outside the box of the bank, and greatly accelerates the distribution of financial services.

Banking as a Service (BaaS), enabled by APIs from banks, allows development of modern applications on top of the bank’s legacy systems. BaaS unbundles financial services, allowing modular use and better customer experiences.

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