To rival the ubiquity of quick response-based payments, card payment providers are tapping merchant's smartphones to help them accept digital payments
Bengaluru: Global card network operators such as Mastercard Inc. and Visa Inc. have been hard at work to increase their payments acceptance infrastructure, experimenting with new form factors as well as issuing more cards in newer regions, as competition in India’s digital payments ecosystem heats up.
To rival the ubiquity of quick response (QR)-based payments, card payment providers are tapping merchant's smartphones to help them accept digital payments; working to equip offline merchants with contactless near-field communication (NFC)-based payments, as well as launching solutions for online platforms.
Visa is in talks with various payment service providers to increase the interoperability of already placed QR codes, and also show saved Visa cards (on apps) as an option for making digital payments, when scanning the QR.
In June, Mastercard partnered with Axis Bank Ltd., payment service provider Worldline to launch its Soft POS solution, enabling local kiranas to accept payments; send payment links to customers and even accept NFC-based payments.
Mastercard plans to now take its India-first Soft POS solution to Bangladesh, Sri Lanka and Nepal over the next year, through partnerships.
“Mastercard’s business strategy is centered around using our technology and expertise to deliver better ways to pay. In doing so, we connect financial institutions, fintech startups, merchants, governments, and consumers around the world. These partnerships will empower merchants to start their digital journey, offer differentiated value propositions to consumers, enable financial institutions and digital players to capture new electronic flows," said Vikas Varma, chief operating officer, south Asia, Mastercard.
It also partnered with banking-tech provider Goals101, earlier this month, to help banks hyper target customers better, and provide rewards at their favourite digital transaction points-of-sale and retail outlets.
"The solutions Mastercard creates through these partnerships creates differentiation for banks, and in the long-term creates preference for the Mastercard network," sa Aman Ahuja, vice-president, product management, south asia, Mastercard.
According to Ahuja, contactless payments is a big frontier for card payment providers, and covid-19 has accelerated the process. According to Mastercard, there are a total of 50 million contactless cards in the Indian market, and as effort remains to increase acceptance points of this service, 25% of face-to-face credit card transactions, and 6% of debit card transactions (12% of all card transactions) are happening through contactless means. Earlier, less than 4% of total offline transactions were happening through contactless means, last year.
In May, RBI also removed the limits on contactless transactions in the country.
Unified Payments Interface (UPI) is planning to add NFC capabilities to its payments infrastructure and National Payments Corp. of India (NPCI) is in talks with payment aggregators to push the product across point-of-sale (PoS) devices.
Visa is also working with new-age platforms like neo-banking startup OPEN, payments bank Paytm Payments Bank to issue more Visa branded cards in the market. It is also in partnership with business-payments provider, PayMate, which it invested in July, last year to offer enterprise solutions to merchants and small businesses.
“Proliferation of options beyond traditional cards and digitisation of payments is accelerating. The way people access and interact with payments will fundamentally change and there are a growing number of ways how money can be made whether it is QR, link-based payments. Traditional approach to payments and riding on one network will not future proof money movement in India," said T. R. Ramachandran group country manager, India and South Asia, Visa.
Post covid, 60% of all digital transactions in the country have shifted to online platforms, which stood at 40% earlier, according to pre-covid levels. To help customers with faster online checkouts, Visa has the ‘Visa Safe Click’ platform, and Mastercard has its ID ‘Check’ offering, eliminating the need to wait for users to wait for One Time Passwords(OTP). Even UPI transactions need a specific pin
Nonetheless, due to covid, total credit card transactions in the country declined to 1.2 billion and debit card transactions declined to 3.09 billion, in June, from 1.8 billion and 4.3 billion transactions in February,shows RBI data. While, UPI transactions have steadily grown to 1.49 billion transactions in July.