After Demonetization, India Seeking a New Normal

india

The payments news from India just keeps coming.

As the government continues its push toward a cashless society, its policies are getting mixed reviews. But companies continue to shore up their digital payment offerings, hoping to capitalize on the climate there.

Earlier this week, another government-backed payment scheme hit the streets. This time, the method is based on QR codes. Bharat QR users can pay with Visa, Mastercard or RuPay, India’s domestic payments network. American Express will also participate, according to a press release.

As PaymentFacilitator.com has reported before, QR codes are attractive to many small and micromerchants. They don’t require traditional point-of-sale infrastructure. This makes them easy to use and less expensive to deploy than other solutions.

In the case of Bharat QR, the merchant posts a QR code at the point of sale. Consumers use a BharatQR app to scan the merchant’s code when they want to make a purchase.

In its announcement, Mastercard said that Bharat QR is the first interoperable system that doesn’t require both parties to be a member of a particular scheme.

For its part, leading Indian PF Paytm said that it is investing in its own QR solution. The Economic Times’ ETTech reported that the company will use the funds to shore up its backend system. Paytm has a goal of signing up 1 million merchants per month, the report said.

Is all this investment in technology taking hold?

According to a recent study from Deloitte and the Confederation of Indian Industry, more than half of merchants (56%) in India do not accept digital payments of any kind.

Not surprisingly, the acceptance of digital payments varied by the merchants’ size and location. Larger merchants and those in cities and metro areas were more likely to accept electronic payments. This highlights the need for solutions to reach small and micromerchants in outlying areas if India is to achieve its cashless goals.

The study also found that customer demand was the primary reason merchants had adopted digital payments. Mobile wallet usage at the point of sale had doubled since demonetization in November, the report said.

And in other news…

Flipkart, a leading PF and online marketplace in India, has adopted Microsoft’s Azure cloud platform. According to Microsoft, the company plans to use Azure’s “artificial intelligence, machine learning and analytics capabilities” to deliver “relevant and personalized experiences.”

A story in Hindu Business Line quoted Paytm founder Vijay Shekhar Sharma as saying that Paytm’s new payments bank would launch this week.

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