UPI (Unified Payments Interface)

UPI (Unified Payments Interface) was launched in 2016 and is equipped with the principles of interoperability, consumer choice, and forging partnerships between banks and the fintech domain/community.

UPI was born because of the existence of a lot of payment systems in the market with no seamless connection with each other.

With UPI, the transaction volumes have grown drastically, which is 123 times.

Data reveals that the transactions went from 2 million in December 2016 to 246 million in June 2018 as this platform proved to be a success amongst the citizens.

 FUTURE WITH UPI AND MORE APPS

In the years to come, it is expected that the era of mobile-first strategy will come where consumers may use functionality-rich and user-friendly apps for P2P (Person-to-Person) or P2M (Person-to-merchant) payments. Moreover, digital payments from citizens to governments imply a big opportunity.

With more awareness amongst the public about the advantages and features of digital payment apps, it is sure to benefit a large section of society.

It is also anticipated that more people come to be aware of frauds or dos and don’ts while dealing in digital payments in the coming time.

Fintech domain, in collaboration with banks, will build its digital economy much better and faster with time.

IMPACTS AND BENEFITS

BHIM app, which is UPI-based, has made its mark in the country with it receiving or sending money from or to non-UPI-based accounts. It can be done by scanning the QR code instantaneously.

BHIM app allows the money transfers between two bank accounts and that too even on weekends and bank holidays.

Various benefits of this app have provided for ramping up of the ecosystem and an increase in digital payments.

Apart from the provisions of safe, convenient, and everyday access to making transactions, the BHIM app allows for checking the bank balance as well.

These features and such apps help in making the country pro-digitization and are constantly making people inclined toward participating in digital methods of making payments for the goods & services purchased.

Recently, as RBI has openly invited more private firms to enter the payments system space, more such platforms are expected to be available for the public to get involved in digital methods of making/receiving payments.

Source: ET Tech

The fintech domain/community is looking forward to many more such opportunities where government nudges forward such advancements in the digital payments system.

With demand and requirement for such technology, there are over 90 BHIM UPI apps having been provided by the banks and third-party providers to the customers of 130 banks.

Having joined the UPI bandwagon in collaboration with banks, the digital payments sector has been able to boost its services and reach to customers accordingly.

UPI AND FINTECH

UPI, by default, is the platform that enables two entities to make transactions happen. This benefit to the masses is readily available, irrespective of the user interface which helps bring a seamless authentication and authorization.

Fintech, along with UPI, extends its services and advantages to the masses effectively and with a huge optimistic impact.

Fintech and UPI together have brought a financial transformation and a revolution that has made the country come a long way in being cashless.

The true digital side of the country is expected to only show up with such advancements in the digital sector in the future. Especially as this also leads to a reduction in the chances of money laundering and tax evasions.

To provide their services, the Fintech domain provides for quick, convenient, and safe transactions to their customers.

Added with the needed infrastructure, UPI & Fintech domain can move much ahead together in a matter of some time.

International best practices that can be adopted and other Speculations for Indian Digital Payments’ Sector:
  • India is expected to adopt much better internet coverage as well as connectivity to increase the trust on digital payments. A lost network in the middle of a transaction/withdrawal is an active issue and leads to delays in some areas of the country.
  • Need for Cap on cash transactions and instead availability of a quick and easy-to-use mobile app on all mobile phones.
  • More awareness of the benefits of having a bank account. The awareness of extracting benefits from bank accounts can lead to more bank accounts and hence, more digital transactions.
  • Need for bringing public transport and services under the ambit of cashless transactions.
  • Education and awareness of the customers using digital methods for making payments is expected to be increased soon.
  • The needed availability of preferred language options in the apps with regard to different regions and states is another speculation.

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RBI’s Move on Embracing Pvt Firms to set up Payment Systems

The news of RBI having had outlined the norms for private entities to set up payment systems like IMPS, UPI, and so on has given a reason to innovate new options. This decision has sent an indication that the country is going to witness an era of even more progressive time in the coming future. It is a fact that banks have been the conventional doorway to extend payment system until the time non-bank entities were permitted to be a part of the payment space.

With inclusion of more of non-bank entities in the payment system, the demand for varied payment services can be met with ease. This move by RBI is a high-spirited one as these private entities are both competitive as well as co-operating with banks. Hence, they strive to provide the eco system with a boosting go-ahead, which is extremely beneficial for the economy as a whole. This move by central bank is a liberal one and is sure to help the country grow parallel to the fast pace of technological changes happening frequently worldwide. By the end of 2018, reportedly, there were 89 authorised non-bank (private) Payment System Operators (PSOs). This was a necessary step since many of the private or non-bank entities have been contributing to the payments domain even though there are some elements, which draw distinction between their roles and the roles of banks. This move is sure to increase the digital transactions successfully.

The issues, to look into, which are the concerns of RBI, like, concentration of all payment systems in a single entity and lack of competitiveness, have some actual drastic implications on the entire eco system.

An example of a single payment system operator for multiple payment systems is NPCI, that has following under it:

National Financial Switch (NFS), CTS, IMPS, UPI-including Bharat Interface for Money (BHIM), National Unified USSD (Unstructured Supplementary Service Data) Platform (NUUP), NACH, AePS, BHIM Aadhaar Pay, APBS, BBPS, National Electronic Toll Collection (NETC), National Common Mobility Card (NCMC), RuPay.

The risky implications associated with the current scenario of limited Payment System Operators (PSOs) and a wide array of payment systems are as follows:

  • Operational Risk – Having a single entity for various payment services calls for a huge risk to take. This is because in case of failure of entity the fall back options go down to being nil and it may lead to a huge loss. This is sure to affect the flow of the availability of services.
  • Static ecosystem – Being a single entity creates the structure of monopoly in the eco system, which can deprive the same of improvisations, innovations and upgradations which can otherwise surge and bring additions and betterments in the services.
  • Hampered quality of services – Non-diversification of payment system operators for varied payment systems may lead to hampered quality of services as the payment operator may compromise on charges, access, quality of services, and so on in absence of a competitors.

Important Decisions and their Consequences for Appropriate level of retail payment systems and operators:

The proposal of multiple payment system operators (PSOs) is bound to make for a better ecosystem since more operators encourage competition and bring in betterment. With several entities flowing in, more competition means more entities racing forward to bring in innovative and upgraded services. Consumers being the ultimate beneficiaries of all the developments, these services are sure to make a country progress toward betterment in terms of digital transactions.

Open and keep-on-tap the window of making applications for all the payment systems is another advantage for digital payments space. In this, the entry and exit being open on-tap can make both the receipt of applications for entry and exit of the entities unable to achieve the requirements much simpler.

Liberal entry point norms have been approached for providing several benefits to non-bank (private) entities as well along with alignment of regulatory framework to encourage participation by more private companies.

With this move by RBI, we foresee progressive changes and dynamic improvements as well as advancements in the payment ecosystem along with the way consumer makes payment transactions. In our opinion, these are going to nudge the country toward betterment by synchronizing the payment systems with the global parameters.

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Reasons you should consider shifting to Online Platform

It is a well-known fact that online shopping has drastically transformed the way people do business as well as shop being customers.

Over a period, there have been several such advancements in the online domain/sector that people have got increasingly inclined toward almost everything online.

With everything positive, online sector has ramped up the way people indulge in buying and selling on an everyday basis.

Earlier, for any business, the businessperson had to invest lot of time, efforts and money in starting as well as continuing a business entity.

Considering the present scenario, online domain is the one that is ruling across the ecosystem and has brought some very legit and required changes in the system so far.

Both as an owner of the online business as well as the purchaser from such businesses, public has benefited a lot.

As a Payment Gateway company working with various online businesses, we are sure about the following benefits you can enjoy by shifting to an online platform:

  • Helps you save in set-up and operational costs since there is not much requirement for investment when it comes to starting or continuing an online business. One need not rent or buy any premises, hire assistants or even be physically present at one place to answer all the queries.
  • It is highly convenient since a businessperson can be on the go and still be actively working on the available gadgets like mobile phones, laptops, and so on.
  • Reduces order-processing cost as customers’ orders can straight away reach the outlet without any delay or interruption in between.
  • It brings a hike in sales opportunities since online platform gives the opportunity to reach global audience for the goods and services the business is set up to sell.
  • As the online business can be 24/7 accessible, it is highly possible that it may end up competing with much larger and successful businesses in the long run.
  • Processing and receiving of payments is much easier with online business since it is a quick and more convenient process.
  • There are more chances of improving the products/services/offerings with the help of after-purchase customer reviews. These reviews take barely any time to be sent by the customer and serve very essential since it gives the business an opportunity to be better and grow expansively.
  • It provides for the online shop to showcase the products with no maintenance as compared to the maintenance required by a physical store.

Adding on to it, there is a sharp shift from buying traditionally from the stores toward buying online and this makes putting your business online even more beneficial as a businessperson.

This positive shift has drastically favored online businesses with an increase in their sales over a period.

Customers find online platform the best way to save time, efforts, and money. So you, as a customer, can benefit from online platform in the following ways:

  • Pampering the loved ones even residing far is an ease now-

There is undoubtedly a lot of convenience to send gifts online to even the loved ones residing farther from the person sending gifts.

  • Need not keep wads of cash for making payments-

Earlier one used to keep wads of cash handy for making payments for goods/services purchased in a store.

Physically making the payments has many disadvantages including all the disadvantages of carrying or hoarding currency notes.

  • Delivery at your doorstep-

With online shopping, provision of delivery at your doorstep adds to the convenience of the customers since one does not need to take out time for going to the store and picking the products required/purchased.

  • Can place the order for products/services while on the go-

As there is availability of gadgets like mobile phones, laptops, and so on, it does not require that the customer be at one particular place for placing the order.

Thus, advancement in technology has changed things for the better.

  • No crowd-

Since online shopping does not require you to be physically available at a store, the issues faced while shopping at the stores are not really the concerns while shopping online.

The customer can ditch the crowd while shopping online  specially during festivals or national holidays.

  • Better price-

Online shopping always provides its customers with much better price than what is available at retail stores.

With several discounts, cashback and other such offers, one is able to shop not only with less time and efforts but also for less price.

  • Better variety-

Often found, online shopping portals/platforms usually provide the potential customers with much more variety than the stores do.

This is possible because of the benefit of the possible option of displaying all the products virtually.

  • Less compulsive shopping-

Often when while being out shopping, public ends up buying things compulsively that we do not really need.

All because shopkeepers pressure us or use their selling skills to compel us to make these purchases.

Sometimes, we even compromise on our choices because of the lack of choices in those shops.

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Tokenization – the New Revolution?

Reserve Bank of India (RBI) released the guidelines lately mentioning tokenization of debit and credit cards.

Tokenization being the new method for making payments from your credit and debit cards is being perceived as the new revolution.

Since this revolution is going to completely change the way public makes payments with their cards, it seems to be bringing more progressive atmosphere in the digital payments’ sector.

Since this method will replace all the debit and credit card details with a code called “token”, this token is considered safer and convenient as it is going to be specifically for the card, the token requestor and the device being used to pay.

The most serious issue with digital payments is the safety and security of the money when it flows from the customer’s account (issuer’s bank) to the business’ account (acquirers bank).

Availability of the code/token is bound to make the process of the flow of payments easier as well as safer.

As the frauds and hacking rates are increasing, it is a delight to the payments’ sector to be witnessing prompt actions for winning over fraudulent activities.

Recently, digital payments’ sector is picking pace in the country and so are the number of transactions by public.

People are becoming aware of the technology that is invented to help them make their lives easier with regard to making payments.

However, along with all things great, come certain issues to plague the flow of successful functioning. These issues revolve mainly around the security of the flow of transactions.

With tokenization, Reserve Bank of India (RBI) has set various safety “conditions” for making each transaction flow as safe as possible.

It is felt that the Tokenization service will up the level of payments’ security and the reasons why it is believed so are as such:

With the provision of application on which the token requestor will receive token, there is also the provisioning of security of token requestor’s application on the device.

This will consist of authorised access to token requestor’s app on an identified device.

It is sure to increase customer confidence in digital transactions and to help the country lower down cash payments drastically.

Since it is all to be made possible by card network getting the token requestor certified for the security and all other function performed by the token requestor, it assures high level of security.

Secondly, there is a provisioning of adequate safeguards to ensure that PAN cannot be found out from the token and vice versa, by anyone except the card network.

This brings an added security to the service.

Thirdly, all the certifications to be provided to issuers/acquirers, their service providers and any other entity involved will be conforming to the international best practices.

Fourthly, secure storage of tokens and associated keys by token requestor on registration of card will be successfully ensured.

Fifthly, arrangements are made for easy access to customer service for any dispute resolution or in case of loss of identified device or a similar situation in which the token may get exposed to unauthorised person.

Adding on to it, card network will actively ensure that only those transaction requests will be processed which have originated from the identified device.

Furthermore, the power to reject to register the card lies with the card issuer in case the card issuer suspects the token requestor to be an unauthorised person.

Lastly, and most importantly, a periodic system audit, at least once a year, of all parties involved in the process of providing the service to customers is a must, according to RBI.

All the aforementioned reasons build strong points and support the fact of security and safety with token usage and that it is a very useful step.

Certain other areas that are advantageous for the public are the applicability of the same instructions for tokenised card transactions as for the card transactions and no additional charges for the customers availing this service.

Speculating an elevation in the security level of digital payments with this move, it is strongly believed that the tokenization service is going to prove to be helpful for the ecosystem as a whole.   

Hence, we believe that tokenization service has been introduced to help maintain security of the transactions, but will also help deepen digital payments in the country conclusively.

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Disruptors for Fintech vis-à-vis changing Regulatory requirements

Fintech has been facing various challenges ever since its emergence in India. According to a report in Economic Times on 21st January 2019, the disruptors (rules/laws regulating Fintech/Digital Payments) have been challenging Fintech in various ways.

Fintech was recently confronted by Supreme court’s verdict on September 27, 2018 which mentioned withdrawal of Adhaar as a mandatory identity proof for e-KYC.

Mr. Rajesh Desai, CEO of Lyra Network, India also gave his opinions back then regarding various factors that emerged out of the verdict and may reflect in the future endeavours of the company.

It was revealed by Mr. Rajesh that the organization was going to face certain difficulties while authenticating the merchants/clients.

Also, the probabilities of operational efficiency became a more daunting task as the operational cost and time went up with the inclusion of other types of authentication documents from the customer’s end.

Nevertheless, this verdict was abides by and respected and operations were carried out in accordance with the same.

The efficiency, undoubtedly, needed special consideration as the fact remained the same and the company affected the required changes promptly in all the aspects.

On one hand, India, as a nation, puts emphasis on start-ups to emerge and prosper as much as possible; on the other hand, it also needs to ensure its citizens about keeping their right to privacy intact at all times possible.

Consequently, this was a challenging situation also for the country and the law alike.

The article in Economic Times also mentioned about the rules on local storage of payments data as another disruptor for Fintech.

On the rule for storing payments data, a six-month period was given to firms to comply with the directive and a deadline of Oct 15, 2018 was set.

This directive needed digital payments’ companies to begin storing payments data in India.

According to Bloomberg Quint, the RBI first drew attention to the issue of local storage of payments data in April,2018 when it noted that only a few firms are storing such data in India.

Local storage and access to such data, the RBI said, was essential for supervisory purposes.

It went on to say, “All system providers shall ensure that the entire data relating to payment systems operated by them are stored in a system only in India.”

Regulatory uncertainty on some services in the digital payments’ sector is yet another disruptor that is a blow on Fintech’s operations. For an even extended success of digital payments’ industry, there is an urge to form a separate regulator for the same.

This step is the need of the hour and an independent and separate regulatory authority to regulate the digital payment system in India is sure to provide the necessary relief to the Fintech.

Fintech has been treading with pace over the years successfully and has been abiding by every regulation it has been confronted with.

How has Lyra maintained sustainability in the market with all the challenges?

Lyra, as a fintech, has abides by every regulation so far and has maintained sustainability in the market.

To maintain sustainability in the market, it is best to stick to the tips and strategies that have always helped the company in the challenging atmosphere.

Moving forward with the tactics that have always made the way clear and successful needs to always be the forte, according to Mr. Rajesh Desai, CEO, Lyra India. 

Secondly, adaptation to the local regulations is another crucial and challenging task yet a requisite. 

Taking care of the consumer accessibility is another quirky tip that could extend the company a longevity and help it to make its roots stronger in the industry for a profitable time in its future prospects.

Another one can be looking into the consumer satiety promptly and as swiftly as is possible in lieu of any changes.

This can be achieved with time-to-time advancements in and/or with respect to the services rendered to the consumers so that the consumer base does not suffer because of inability in terms of being prepared with the imperative changes in the system.

Developing the client specific services and reflecting the changes in the same need to be the strength of a company apart from all other requisites.

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The need for POS infrastructure in India

With RBI’s major step to appoint a former UIDAI (Unique Identification Authority of India) chief Nandan Nilekani as the chairman of a five-member high-level committee, the anticipations of various advancements in the FinTech domain have got raised.

A major part of this committee is to increase the provision of digital payments in rural areas also apart from urban areas. For this to happen, availability of POS infrastructure in India is the need of the hour.

In a recent article in Hindu Business Line, Mr. Rajesh Desai opined to “Incentivise the payment PoS manufacturer in India to increase PoS base through local manufacturing.”

This suggests that POS manufacturers in India are one of the key drivers of the success of digital payment sector.

Having said that, the FinTech will be able to spread the power of its secure, quick and convenient transaction related services only when the related areas are growing parallel to it.

Few of the major players operating in India POS terminals market include Verifone India Sales Pvt. Ltd., Ingenico International India Pvt. Ltd., Ezetap Mobile Solutions Pvt. Ltd., Mswipe Technologies Private Limited, MobiSwipe Technologies Private Limited, Pine Labs, PAX Technologies Pvt. Ltd, and so on.

BENEFITS OF HAVING POS INFRASTRUCTURE

In the era when online payments have picked pace with all the zeal, the availability of greatly working PoS infrastructure is a necessity.

PoS manufacturers in India can become a big supporter of Digital India initiative as they can make installation of the machine at certain outlets quite convenient.

If PoS manufacturers are incentivised and given the support as required, it will benefit the businesses in several ways. More of PoS manufacturers in the country means more of all the advantages that come with it.

Firstly, the machine is available at a lower price as compared to the machines manufactured by companies abroad.

Thus, it would successfully reduce the expenditure of businesses opting for it.

Secondly, it helps rural sectors adopt PoS machines without paying a hefty amount for them. Moreover, the availability/supply of these machines would be much easier.

Thirdly, the manufacturers of PoS machines can look into the demands of the businesses locally and can inflict changes in supply accordingly.

The endless advantages of greatly working PoS manufacturers in the country can steer the nation toward progress drastically and help keep pace with the digitization.

As PoS manufacturers in India are suffering from manufacturing glitches, it has impacted the reach to unorganised retail merchants/rural markets/small businesses significantly. 

In an article in Financial Express, a PoS manufacturer said, “We had to reorient our strategy in terms of the manufacturing plans, but currently, we are not close to the numbers we had anticipated”.

GROWTH OF POS TERMINALS

According to a data published by RBI, the number of point of sale (POS) terminals grew up to 3.14 million in March 2018, up 24% from 2.53 million in March last year.

However, this growth in the terminals is anticipated to be higher with incentivising of PoS manufacturers in India.

Source: Medianama

Above chart shows the growth of PoS terminals over a period of time in India which is happening at a slow and steady rate.

THE REASON BEHIND SLOW AND STEADY GROWTH OF PoS TERMINALS

According to an article in Wallet buddy, the cost of a point-of-sale (POS) terminal in India ranges from INR 8,000 (USD 118.9) to INR 12,000 (USD 178.3); countervailing duties and taxes account for about 20 percent of the price.

In addition, the annual operating cost is INR 3,000 (USD 44.6) to INR 4,000 (USD 59.4) per terminal. That covers paper and servicing costs, amounting to about INR 3.9 billion (USD 0.06 billion) annually for all installed 1.3 million terminals.

Additional costs include those to build merchant and acquirer capabilities.

A high rate of staff attrition at merchants of 30 percent to 40 percent a year makes the process of capacity building onerous for all parties involved.

Finally, low transaction values and volumes at smaller merchants, especially outside of Tier 1 cities, make it unviable for banks to expand their footprint into such segments.

Manufacturing in a country abroad (Three weeks or more)
Import (Three weeks)
Customs Clearance (Three weeks)
Deployment

Source: Wallet Buddy

The flow above shows the journey of PoS machines or terminals when imported. This journey consumes maximum time and is not cost effective and thus, poses a problem for the merchants in the country.

It is quite evident that the journey of a PoS machine from the manufacturer to the retailer (business) needs to be made even simpler for the country to progressively acquire the number PoS terminals required.

Months (Year 2018) On-line No. of Transactions with Credit cards(Actuals) Amount of Transactions with Credit cards (Rs. Millions) No. of Transactions with Debit cards(Actuals) Amount of Transactions with Debit cards (Rs. Millions)
February 3079487 114753201 376597.4 282007092 370366.4
March 3083067 127292249 443081 318899139 418567
April 3193356 132318612 448342 333766148 454571
May 3247096 138290485 472814 352117113 468079
June 3311184 135976847 462763 358821967 479235
July 3268817 145006210 477585 367352976   483062  
August 3332484 144201787 479818 357172130 489719
September 3393396 138230471 461007 362747915 458411
October 3450355 161064473 561782 393387604 542982
November 3510859 145845853 516176 376567635 540411

Above table shows POS transactions in India in the year 2018

Hence, we can more easily achieve our target of making the country digitally inclined if certain measures are taken and, it can pace up the country to grow parallel to the more developed nations successfully.

The Era of rising Fintech domain!

The Fintech domain, being a new and young industry in the country, is a rebellion. As it has been observed over a period, the technology and the advancements by techno geeks have taken the world by storm.

Be it the sectors that are still in a progressive state or the Tier 1/Tier 2 cities in India, digital payments are gradually becoming a trend amongst everyone.

Since it is much easier to make transactions via smartphone, the user need not use any physical money like cash or plastic version of the same.

This renders the user much feasibility since it does not require wads of cash or lot of plastic cards to be stored and carried along anywhere.

SCOPE OF THE DIGITAL PAYMENTS’ INDUSTRY

The scope of Digital Payments’ Industry is quite extensive and it has already managed to encourage India to go toward cash-less economy gradually from being less cash.

Although, digital payments are yet to be adopted by some of the patches in the country, it has still risen by leaps and bounds.

In the coming future, digital sector is going to be only more and more widespread covering everyone possible since its rate of dynamism and growth is extremely optimistic.

With the various advantages like one-click checkout and password-protected gadgets, digital payments have the provision of keeping the data secure.

Also, a payment gateway is encoded with the facility to provide a secure flow of transaction each time, which increases the security tangent successfully.

Within a short span of time, the Banks, Financial institutions and Fintech have brought various elevations in the payments’ domain that have tremendously simplified the way world operates.

The penetration of Near –Field Communication (NFC) is a technology advancement that has simplified the use of digital payments further more.

NFC is that set of communication protocols that allows two devices to establish communication with each other when brought together within the range of 4cms.

Another wondrous innovation is the facility of instant bank-to-bank transfer with a single API.

Adding to the advantages are the features that cater to the needs of students like making the payment for fees online, being able to apply for studying abroad, buying books online or accessing E-learning applications, and so on.

Further on, with various discounts available on the portals every now & then, it is extremely pocket-friendly for young India.

Seeing the world grow with innovative, useful and convenient furtherance is what Digital Payments’ Sector perceives and is geared up to adopt the changes accordingly.

FUTURE POSSIBILITIES FOR NEXT GENERATION

As far as the future possibilities are concerned, the next generation is going to witness myriads of improvements in the Digital sector.

These innovations are sure to bring betterment in the Digital payments’ sector as well. What can be assumed and expected from the payments’ sector are more secure digital transactions in the coming future.

It can be made possible with iris recognition or chip tied to the wrist of the cardholder with which maximum security can be obtained successfully.

Foreseeing the possibilities, expectations and advancements have no boundaries.

As young generation starts taking the lead to transform the digital space, there are going to be endless changes that will be useful to the society as a whole.

Although it has been observed that only 12% population in India is familiar with English whereas the rest of the country still depends substantially much on their native language.

Understanding this, many smartphone companies provide for the native language as an option and cater to the needs of their customers in this way.

This makes the reach of smartphones and other gadgets quite widespread, which, in turn, allows public an easy accessibility to digital transactions.

With incentives by government, and many factors favorable to the growth of digital payments’ industry, the scope is quite huge.

Summing it all up, even though there are fascinating benefits of being able to make payments quickly, safely and conveniently online, one has to be extremely cautious with the same. As much as this space brings in rosy advantages for everyone in terms of making payments, it also is highly vulnerable to cyber frauds and data leaks.

It is highly recommended that one never shares the bank account/debit card/credit card details with anyone howsoever close the person may be.

As long as one is cautious and is knowledgeable about “dos and don’ts” while dealing in digital payments, it is nothing less than a boon for the society.

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With the change in time and advancement in technology, the developed nations across the world are successfully synchronising with the digitisation of systems and operations on a daily basis.

Ever since government took initiative to promote businesses in India, youth in the country has become tremendously motivated to become self-employed, even more than before.

Along with the emergence of the trend of Make in India (self-employment), another booming industry is that of Digital payments.

With the digitisation of payments, government is adamant on sorting various issues relating to cash payments and is successfully doing so.

Now Digital India and Make in India are both going hand in hand since youth, not only prefers to be self-employed but also prefers a fast life which, daily transactions is a crucial part of.

Further, both the campaigns together constantly support women entrepreneurs in the country at varied parameters.

With the incentives and facilities in both spheres, women are being encouraged to successfully take ahead their businesses without getting into any hassle of receiving or making payments.

 According to an article in Economic Times, PM Shri Narendra Modi said, “Today India is making tremendous progress in the field of digital infrastructure.

Broadband connectivity is reaching villages, over 100 crore mobile phones are active in India. 1 GB data is cheaper than the smallest bottle of cold drink. This data is becoming the tool for service delivery”. 

Making it evident that Digital India is progressing and making the country savour and experience the flavour of online shopping even much more than before, government is actively promoting digital payments.  

PM Modi also mentioned in the article by Economic Times about Make in India by saying, “We’re manufacturing quality products not only for India but for the world.

India is becoming a global hub, especially in field of electronics and automobile manufacturing. We’re rapidly moving towards being no. 1 in mobile phones manufacturing.”

For promoting digital payments in the country, various online start-ups, apart from digitizing physical stores/businesses, are imperative.

Whereas, for the online start-ups to be successful, secure, quick and convenient digital payments’ platform is necessary.

Indian digital payments’ sector has succeeded drastically from the time when failure rate of online payments would be recorded as 40% and it would take 60-80 seconds to process a transaction.

Contrastingly, now, the advantages of digital payments have surpassed the drawbacks and majority of the earlier glitches have been successfully resolved to make online transactions a success in the country.

Hence, with the advancement in technology, for processing each transaction, the record says it takes less than 10-15 seconds in today’s time.

With the smartphones and broadband connectivity reaching every nook and corner, there has been a steep rise in the number of transactions done via smartphones.

The graph above shows the number of smartphones sold from 2014 to 2017.

With the penetration of more number of smartphones in the country, online transactions have gone from $86 million in 2011 to $1.15 billion in 2016.

Source: Economic Times

With the surge in online transaction across the country, it is but obvious that the demand for online purchasing has also gone up drastically.

With the demand for online purchasing, the supply of online shopping portals has gone up as the youth inclined toward being self-employed prefers to start an online business nowadays.

The advantages of digital payments are many for both owner of the business and its customers.

With various incentives provided by government sector for promoting digital payments, customers prefer buying online.

These incentives serve as the added advantage with other advantages of shopping online for the customers, like time saving approach, more convenient than handling cash transactions, safer, and helps to pay exact amount without any hassle.

Government provides for the incentives and promotes online transactions because it helps it keep tabs on each transaction.

This further prevents tax evasion and keeps illegal transactions at bay.

This has led to the provision of e-commerce platforms from many of the existing business owners and from the new entrants/start-ups.

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As the title suggests, a cashless economy is over the top powerful as it provides numerous benefits to the citizens of a country.

Be it expanding the business, opening a new one or functioning as a buyer, the method of making transactions is the major deciding factor about success.

For India and its citizens, shifting from a “cash” dominated mind-set to the “less cash” one has been challenging yet fruitful.

An economy on its way to complete development requires more than just adapting to the changing trends of the world.

It implies that, for changing the economy of a country like India, there needs to be a widespread awareness of the beneficial impacts of the same.

Moreover, apart from the awareness, any changes brought in the impactful industries need to be accessible to the laymen for them to start making maximum use of the same.

Now gradually, India has moved toward becoming cash less economy from being less cash and it has proven to be in the favor of country’s growth.

With more & more tech-savvy youth opting to start their own business, digital payments/cashless transactions are becoming even more common in the country.

And with this, as the country is treading toward Digital India, the economy is becoming more and more powerful. There are these following ways in which digital or cashless economy shifts a country towards more progress:

One, with the emergence of and adaptation to cashless economy, corruption in the system is being reduced drastically.

With less cash in circulation, government is able to keep tabs on the digital payments and thus, in this manner, any illegitimate transaction does not go unaccounted for.

This practice saves the country’s growth from being hampered and rather, leads it toward betterment.

Two, the ones wanting to expand the business can get an easy access to loans with their past record of transactions done digitally.

This implies that an individual, despite having a business, cannot get the access to loan if the past transactions were done in cash and have no record in the formal financial framework.

Three, it keeps the arena of terrorism from being funded as the illegitimate activities cannot be funded via an online platform.

With tightly secured platforms, it becomes near to impossible to let any cyber crime take a toll on the society and thus, prevents money laundering from affecting the economy as a whole.

Four, digital transactions help entrepreneurs in several ways. The entrepreneurs that take digital route for making transactions make their business transactions secure, quick and convenient.

Transactions done via online platform, on a daily basis, help these entrepreneurs become a vital part of the growing economy.

With so many incentives available for masses from government’s end, the entrepreneurs benefit the most as individuals become highly inclined toward buying online.

Five, with the history of transactions being available, digital payments help one understand unnecessary expenditures that can be avoided.

This psychological and practical phenomenon further helps in increasing investments as the money saved can be invested and can reap more profits for the individual.

This helps in overall shift of the economy toward becoming more developed.

Six, Digital transaction contribute to women entrepreneur’s progress by keeping their business transactions quick and convenient without them needing to go to banks or ATM that may be far and unsafe to travel to.

The payments made digitally keep progressive and ambitious women from going through lot of hassle especially when there are several social norms prevalent in the society.

Moreover, because of various family related obligations as well, many ambitious and talented women find immense comfort in handling transactions on their gadgets.

Seven, with the online services, the demand as well as cost of maintaining physical stores go down significantly.

This helps both the customers as well as the entrepreneurs alike, since, reduced cost means reduced charges for the services/goods sold.

Hence, customers end up paying much lesser a price for the service/good purchased and get benefited. Not only do the customers benefit in monetary terms but also in terms of time spent since the time spent in traveling to a physical store gets saved.

This time saved can be utilized in other aspects that the business may be needing a check into. The growth of an entrepreneur directly ups the status of the economy and the country alike.

Eight, customer base in farther areas are taken care of when there is an availability of making payments digitally.

If a service provider wants to sell its services to the customer base located in far off places, he/she can do so with the digital payments easily.

This ease with shopping portal and access to digital payments tremendously help the country be even more successful with more sales as well safe and quick transactions.

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Do Digital Payments Affect your Entrepreneurship? If yes, then How?

If, as an entrepreneur, you have not considered the method of making payments as one of the aspects that may affect your entrepreneurship, then what lies ahead in this article may help you understand its intricacies.

By letting people be added into the formal financial system, digital payments have influenced the masses significantly.

With the penetration of mobile phones in the society and facility of digital payments from the same, shifting to the world of digital payments from cash is over all beneficial for the entrepreneurs.

Digital payments, being more secure, convenient, and hassle-free, provide the individual with the facility of cashless transactions on the go.

With various options of making transactions online, such as via UPI, Net banking, Wallets, and Cards, digital payments have become the new trend in the industry.

Further, entrepreneurs are highly benefited because less of their time as well as operational cost is levied with cashless transactions.

This is how an entrepreneur/entrepreneurship wins by opting for digital payments:

HELPS KEEP TABS ON PAST PAYMENTS

When an entrepreneur opts to go digital with payments, it broadens the chances of its business to manage inventories and improve profit margins.

It is a psychological fact that keeping a check on the history of payments helps the entrepreneur plan its future sales and increase the profit margin successfully.

GOING ONLINE INCREASES VISIBILITY

By going online with digital payments, you tend to increase the business’ visibility and consequently, up the chances of it earning maximum profits.

The trend of e-commerce in today’s era has successfully inclined majority of public toward e-commerce platform in terms of both buying and selling.

ENSURES SECURITY OF EMPLOYEES’ WAGES

Digital payments ensure the security of the wages of employees which helps both the employer as well as the employee.

Not only the security, transferring wages of the employees in their account also leads to accuracy of the amount credited.

AN AID TO WOMEN ENTREPRENEURS

In certain parts of India, because of the social obligations and family responsibilities, it is not quite feasible for women entrepreneur to travel to distant suppliers or bank branches.

There are many women who have recognized the importance of becoming independent and have commenced their own businesses.

However, unfortunately, still there exist some glitches in terms of the societal and family pressures along with certain other drawbacks, like unavailability of bank branches nearby and so on.

Hence, women entrepreneurs get a boost with digital payments being there savior.

GOVERNMENT SUPPORT

Since government benefits with public dealing in digital payments in terms of getting to minimize tax evasion, the support from its end remains at its peak.

As government incentivize digital payments for the masses, it leads to more and more inclination of people toward online portals to make purchases.

Hence, this improves the status of online businesses and makes the entrepreneurs win constantly.

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