Whether it was in the days of barter or cigarettes for goods and messages as shown in the 1994 movie — The Shawshank Redemption —financial transactions have always been an integral part of our lives. And just like the universe, currency and payment methods too have evolved and continue to do so. We have gone from metal coins to paper currency, plastic cards to digital wallets and now even sound-waves for transactions.
Commenting on the timeline of change that has taken place in the manner in which transactions have evolved, Nath Parameshwaran, Director, Corporate Affairs, PayPal India during Inc42’s Ask Me Anything Facebook Live episode said, “The diversity of options available for transacting including wallets, UPI, bank funding, etc is truly fascinating. Our journey from cash to digital is growing at a fast pace.”
Digital payments are proving to be game-changers in more ways than one, and the industry is set to grow to $1 Tn by 2023. This figure speaks about the immense potential digital payments have especially for freelancers and small and medium enterprises.
The India Opportunity for PayPal
Adoption of digital payments is increasing, especially amongst freelancers and small and medium enterprises. India is the fastest growing freelancer economy in the world and is home to close to 15 Mn freelancers today.
PayPal has enabled cross border payments for over a decade, helping freelancers and small and medium enterprises to leverage the global opportunity and realise the Make in India vision of the government. Recognising the untapped opportunity, PayPal launched domestic operations in 2018 giving freelancers and SMEs the convenience of a single account for their domestic and cross-border payment requirements. All this backed by PayPal’s robust risk and security platform.
On asking Parameshwaran about the progress of both, he emphasised, “It’s an exciting new chapter for us to be able to offer our services in the domestic market and it compliments what we are doing in the cross-border side at the same time which is enabling SMEs and freelancers to grow their business. PayPal’s vision is to offer a frictionless payments experience backed by our Buyer and Seller protection policies. It is trust that has helped us become a global leader in payments across 200 markets over two decades.”
He further added how PayPal customises experiences and products to meet local requirements and solve real problems. ”We offer products and solutions tailored to the requirements of all our merchants whether they are freelancers, SME’s or the large merchants,” said Parameshwaran.
Data Protection: Need Of The Hour
As cross-border trade increases, there is a need for a faster, frictionless payments experience with trust at the heart of the transaction.
Demonetisation was a landmark move to propel India on the digital payments journey. It helped Indian consumers and merchants experience the convenience of transacting digitally. This has also lead to newer players- Indian and global enter the market and leverage the opportunity.
”As the adoption of digital payments increase, there is a greater need to ensure risk and security is not compromised. The ‘bad guys’ are forever looking at ways to breach the system. Moving money from Point A to Point B is easy, its managing the risk behind this movement which is a game changer. At PayPal, managing risk is at the heart of everything we do and also understand that managing risk will help unlock value in the sector,” said Parameshwaran.
Is A Cashless Society Possible In India?
Despite the boom in digital payments, a major percentage of transactions in India are still carried out using cash. Therefore, is forming of a cashless society possible? According to Parameshwaran, it will be mixed. He said that India will continue to use cash but at the same time we will also have a very fast and large contribution by digital payments.
“The infrastructure that has been laid down provides an absolutely great foundation for us to lift off from where we are today to the next orbit in terms of digital payments. Though it is still 10-12% of the overall pie but it’s still growing pretty fast, at the same time I think we should also be realistic that not many large economies around the world have been able to make truly cashless societies and that’s why I must compliment the government and the regulators because they seem to have a realistic vision when they say less cash society,” he said.
Besides this, with the positive steps such as RBI setting up committees to promote adoption of digital payments and increasing awareness about digital transactions; along with the internet adoption even in tier 2 cities and rural areas, the country is soon expected to become a less cash society.
Parameshwaran emphasised, “The road towards a cashless economy will be a combination of a revolution and an evolution.” According to him, the evolution would be a behavioural change which will occur slowly, while, the revolution will be on the technology side — as more and more startups keep coming in.
The fact that now there is better connectivity, with the Digital India programme seeping into villages/towns of India — even the remotest corners will embrace the adoption of digital payments. There will be a stage where people will have a reasonable and predictable bandwidth available both on the mobile and hopefully on the cable network or even broadband. “This will drive the next wave of penetration,” he added.
He signed off with an air of optimism saying, “The digital payments opportunity in India is very exciting for PayPal and we are looking forward towards partnering with the Government to realise their vision of Digital India.