Monthly Archives: December 2015

An Overview on Future of Payments System

Payment of money other than paper modes over the past few years has surged into many folds in the form of net banking, debit card, credit card and e-wallet etc. People use multiple ways of payment to send money while shopping or making payments for using tech support service. The scenario has been changed significantly in last few years and become one of the most essential methods of payments for different sectors also shifting the ecosystem of payments system.

Higher Participation of Intermediaries

Card payment intermediaries like Visa, Master Card and Rupay are the leading payment network providers facilitating between customers and merchants. These intermediaries are also one of the largest players act as payment gateway providers for executing online merchant transactions at very low cost. E-wallets are playing crucial role that works like a prepaid instruments to store cash that can be used to make payments for different merchants.

Participation of Govt. and Payment Banks    

With the rise of increase of demand among people to use card payment of net banking, the commercials banks also actively promoting online payment instruments for their customers. Even Govt. has given approval to various non-banking intermediaries to act as a “Payment banks” who are not allowed to pay loan that reduce their risk of NPA, bad credit defaults or insolvency which is commonly higher among scheduled commercial banks.

As per the reports currently India has around 600 million debit card users and merely 22 million credit card users which is around half of entire population of country. Hence, remaining population can get opportunity to use such highly integrated payment system in near future. The financial inclusion policy of Govt. will encourage people to open new bank account and make use of advance baking facilities like net baking, credit card and e-wallet etc.

High Demand due to Increasing Online Merchants   

Globalization tends merchants to operate in multiple countries. A payment gateway for tech support or ecommerce business can carry our money transfer from one currency to merchant’s currency. And it is possible when a customer can make payment online using his debit or credit card. A huge opportunity lies ahead for payment banks and merchants highly reliant on such payment system. Ecommerce and other online based services are increasing rapidly but these sectors are still struggling to penetrate major towns other than metropolitan cities. Nevertheless, payment gateway and payment banks both will be benefited by the ecosystem formed through this banking payment system and mobilization of new technologies towards this sector.