A few years back, there were payment gateways but they were not as popular as they are today. The Indian payment landscape is growing at an infectious rate. With the e-commerce industry growing and spreading like a wildfire and an increasing number of online users, payment gateways have become indispensable to businesses. But apart from e-commerce, what are the other factors leading to the sudden rise of payment gateway in India? Let’s find out!
Payment gateways offer a safe and efficient payment processing environment to businesses.
Reasons Behind The Sudden Rise Of Payment Gateway in India
There is no hidden fact that the payment landscape in India is largely influenced by global payment trends and technology. And payment gateways in India are also a result of these modern payment trends and customer requirements. Earlier, people were reluctant to make online transactions because they used to believe that it involved some sort of fraud and they’d end up losing their money. This is the reason why “Cash on Delivery” was the most favourite option of the online customers.
But after the arrival of payment gateway technology and digitalization, things have escalated quickly. Today, a majority of customers prefer making digital payments over hard cash transactions. The reason is simple, making online transactions is quick, simple, and secure. While the “Cash on Delivery” option is still there, most customers prefer making digital payments easier and more convenient.
Below are some of the major factors that have lead to the sudden popularity of payment gateways in India :
1.Making of A Cashless Economy
According to the latest ASSOCHAM-PWC study, India is expected to witness the highest growth rate in digital payments before 2023, with a Compound Annual Growth Rate of 20.2% to be precise. This is the biggest example of the country taking a big step towards building a cashless economy.
The fierce growth in digital payments in the country is directly intertwined with the growth of businesses. No online business, big or small can afford not to have means of digital payment options on their platform. This is the main reason why a majority of e-commerce businesses in India have adopted payment gateways. They not only allow customers to make hassle-free digital payments but also make the “cash-on-delivery” options more simplified through QR codes and payment links.
2. Increasing Awareness
As discussed above, a few years back, online payments were considered to be insecure and prone to fraud. The main reason behind this was the lack of awareness among the users. However, in recent times, the acceptance of digital payment methods has grown up to a great extent, especially after the demonization in 2016. Digital payments have increased by almost 76% in the past year. From shopping online, making payments to the local stores, to paying bills, buying groceries and whatnot, everything can be done with just a click.
3.Favourable Government Policies
The government of India deserves fair credit for the rise of payment gateways in the country. The dream of making India a cashless economy has led the Indian government to introduce several favourable policies about digital payments. Digital India, UPI, Aadhaar Pay, etc. are some of the best examples of such policies.
4. Internet Expansion and Smartphone Proliferation
Interestingly, the number of smartphone users in the country are expected to reach 760 million by the end of 2021. This is shocking because earlier this number was just 468 million in 2017. And it’s not enough, after surpassing the USA( 8%), India (12%) has become the country with the second-largest internet user base in the country, according to Mary Meeker’s Report Digital Trends Report 2019.
These stats are enough to prove that digital payments are steadily becoming the future of the modern world.
5. Covid-19 Made Contactless Payment The New Normal
It may sound a bit abnormal, but coronavirus is perhaps the biggest reason behind the success of payment gateways in India in the last 1.5 years. There is no denying fact that the global pandemic situation has shattered the world and pushed many businesses to rock bottom. But the same can’t be said about payment gateways. During the lockdown, businesses that were accepting digital payments were able to safeguard themselves against the threat of crashing economy, all thanks to the evolution of payment gateway in India, contactless transactions have become a new normal.
6. Ease of Making Payments and Reduced Cost
From a customer’s perspective, the main reason behind the massive hit of payment gateway in India is the ease of making digital payments and the convenience it provides to the users. By integrating a reliable payment gateway in India, merchants can provide their customers with multiple payment options. This gives customers the flexibility to make payments using their preferred payment method. Not just that, payment gateways allow businesses to accept payments in multiple currencies and from customers residing in different corners of the world. Thus, they offer an easy way to grow and scale the business.
7. Increased Security
No matter how advanced the world is getting, security is still a major concern among both the customers and the merchants. Most businesses are switching to payment gateways intending to make their payment processing faster and more secure. By having a payment gateway in India, businesses can protect their customer data and offer a safe transaction process to their customers. This helps them gain the trust and loyalty of their patrons. Security features such as PCI-DSS compliance, fraud payment detection, data encryption, are some of the key security features that a payment gateway in India comes with.
There is no doubt that the above-mentioned factors are leading to the growth of payment gateways in India. For this growth to continue, more and more businesses should adopt this technology and embrace the benefits it is capable of offering. So, if you’re still functioning without a payment gateway, then it’s the right time to get one!
