According to the FIS PACE PULSE Survey 2020, there has been a massive surge in mobile wallet users in India. FIS, a global leader in financial services technology and a Fortune 500 company, conducted a survey that concluded that 93% of respondents affirmed that they use mobile wallets to make payments.
The survey highlights the impact of COVID-19 on digital payments in India by different age groups. Notably, consumers in India are rapidly moving towards digital payment options to avoid the spread of COVID-19 during transactions.
Merchant Payments Options in the Upcoming Decade
People are now more likely to use contactless payments more currently and in the long-run because of its convenience and reduced high-touch surface exposures.
In the pre-pandemic world, most customers avoided using digital merchant payments for in-store purchases. The top reason behind this is the security concerns around these transactions’, especially in Tier II and Tier III cities. But people are now turning to digital payments, not just because of the virus, but also because digital payments offer a seamless experience.
The PACE PULSE Survey 2020 shows that 45% of participants use cash and checks less often, especially the young generation. There is a surge in mobile payments, app payments, online payments, and contactless payments during the current pandemic.
In fact, according to the FIS Flavors of Fast 2020 annual report, India has emerged as the global leader in real-time payments, handling the largest number of transactions per day, at a whopping 41 million, which is more than double compared to last year. These findings highlight the immense popularity of real-time payment systems in India, owing to a greater consumer expectation of faster financial transactions and settlements.
As a result, it becomes essential for merchants also to adopt digital payments to stay in business in the upcoming decade. The report by FIS indicates Paytm as the top payment wallet in India.
Contactless Payments, a Key to Retaining Customers during a Global Pandemic
As mentioned, people are moving towards cashless payments instead of traditional methods because of numerous advantages, making it necessary for business owners to offer digital payment options for their consumers’ convenience.
Eventually, merchants who are refusing to adapt to the current situation may get left behind. There are high chances that consumers will move to other businesses that are more responsive to their preferences and requirements.
Many small business owners in India have predicted that they might have to shut down their business due to the economic disruptions caused by COVID-19. There is an excellent opportunity for these merchants to stay afloat by expanding their payment options to accommodate customer preferences.
There are several reliable and convenient payment options for India’s merchants, which include Paytm, Google Pay, PhonePe, and more. While it is not tricky, merchants should start accepting several forms of digital payment.
Impact of COVID-19 on People’s Lives
Besides the contactless payment preference of people, COVID-19 has also impacted the way people work, shop, entertain, and socialize.
According to the FIS PACE PULSE Survey 2020, 70% of the participants have experienced job-related issues since the outbreak of coronavirus and its resultant global lockdown. It is reported that Indian families, especially the younger ones, are financially vulnerable and 48% of the respondents cannot meet financial obligations for longer than three months.
Possible Banking Solutions
Several people are going through financial stress because of the pandemic. During this challenging time, banks can also serve their customers as a partner by providing several “need-it-right-now” offerings such as real-time or faster payment options. Banks can also waive penalties and fees for their customers for going below account minimums.
During this period, specific banking solutions for customers include increased spending limits on credit cards and flexible terms and limitations on personal loans.
Virtual connections and digital channels are emerging as the new norm for Indian consumers to communicate with banks and conduct financial transactions. Consumers are now looking for a substitute for face-to-face communications. They expect and need their banks to provide online, digital banking, and contactless payment options. People now prefer self-service banking and digital transmission over traditional banking methods.
Banks and merchants are currently at the crossroads. It is safe to say that they can only survive and thrive in the upcoming decade via digitalization.
According to the FIS PACE PULSE Survey 2020, the current pandemic has impacted digital and contactless payments among Indian users. It is being predicted that people will continue to use mobile wallets post COVID-19 pandemic as well. As more users prefer digital payment methods, merchants also must switch from manual and traditional payment procedures to contactless payment options.
Redefining contactless payments would ensure a seamless user experience for merchants. Several business owners have realized and adapted to digital payment solutions, and others will be forced to adopt the same over time, to stay in the competition. Moreover, it is high time for banks to offer more efficient self-service and communication systems over traditional banking solutions.