India as a nation is witnessing growth in every sector and segment. One such segment is the payment industry of India. The dynamic payments ecosystem is expanding and evolving, and the digital payments channels are continuing to grow robustly. In the last few years, this industry has seen many trends and forces that are making India the most exciting payments hotspot in the world. This growth in the payment industry comes with a spate of innovations over the last decade. Digital payments were the first disruption, and digital lending followed. Today, where China has etched its name as a leader in digital payments, India has been an able follower. Though India registers about one-eighth the transactions that China does, it matches China on growth. There are several reports that show that India is doing well in the payment industry and will be achieving new milestones very soon. According to RedSeer Consulting report, digital payments in India are expected to grow over three-fold to Rs. 7,092 trillion by 2025 on account of government policies around financial inclusion and growing digitization of merchants. The report also states that the country's digital payment market was worth around Rs. 2,162 trillion in 2019-20.

Factors Responsible for the Transformation
One of the biggest innovation that took place in the payment industry of India was when the Reserve Bank of India-regulated Unified Payments Interface (UPI) in the year 2016. Piloted in April 2016, the platform enabled users to transfer money instantly between two bank accounts over a mobile phone. It gained relevance that November when India demonetized high-value currency notes. In its first full financial year, 2017-18, UPI accounted for 9 percent of all retail digital transactions in volume terms and 1 percent in value terms. These include transactions through debit and credit cards, IMPS bank transfers, UPI and National Automated Clearing House (NACH). By February 2020, UPI’s share had crossed 50 percent in volume terms and 16 percent in value terms. Last year, the unexpected occurrence of coronavirus pandemic and physical distancing provided further tailwinds to the digital payments. In September, the payment method made up nearly a quarter of the value of all retail digital transactions. According to the reports, UPI has emerged as a major payment option for Indians. It has made banking services more accessible to a wider audience by diminishing pain points that are involved in traditional services such as NEFT and RTGS.

According to data from the Bank for International Settlements (BIS), digital transactions in India increased rose by 55 percent for the year 2018, compared with 48 percent in China. This was mainly the outcome of India’s large population with deep mobile phone penetration that was underserved by the traditional banks. Hence, cashless payments gradually became a way of transaction. A KPMG report suggests that India has more than 45 mobile wallet providers and around 50 UPI-based wallet providers. The RedSeer Consulting report further expects that the current 160 million unique mobile payment users will multiply by 5 times to reach nearly 800 million by 2025. Mobile payments will drive around 3.5 percent of total digital payments by the financial year 2025, up from the current 1 percent. The total mobile payment users who currently stand at about 162 million would reach around 800 million during this period. This growth will be driven by a number of demand and supply-side drivers.

Not just that but due to the adoption of digital services, even IT giants and corporate organizations are witnessing huge growth. IT-Giants Infosys and Wipro have reported soaring quarterly sales and profit, leading a group of software services companies that have seen their businesses thrive because of a surge in demand for digital services that helped mitigate the unprecedented disruptions caused by the pandemic. Infosys saw its digital revenue grow 31.3 percent from a year ago in constant currency to $1.76 billion, contributing 50.1 percent to the total revenue for the December quarter. Wipro also reported a nearly 21 percent increase in profit to Rs. 2,967 crore. Revenue rose 1.3 percent from a year ago to Rs. 15,670 crore. In dollar terms, revenue grew 3.9 percent to $2.07 billion from the preceding three months. Wipro forecast revenue growth in the March quarter to be in the range of 1.5-3.5%, driven by an improving demand environment, especially for digital transformation, digital operations, and cloud services.

The Future of Digital Payment
Authentication via Biometric - The use of biometric technology has conveniently eliminated the need to remember a password or PIN to access our devices. Being able to authorize Google Pay or Apple Pay using biometric authentication has made the payment experience hassle-free. Biometric authentication comes with many benefits such as ease, security, accuracy and speed. After the UPI method, biometric authentication method of digital payment is expected to revolutionize the payment sector of India.

Tap-and-go payment - This method is also referred to as contactless cards. Tap-and-go also known as wave and pay payments are much faster and secure than dipping a card. Contactless credit and debit cards use a combination of EMV chips, along with a contactless chip and RFID antenna. The purpose of tap-and-go transactions were to do away with the time-consuming pin code and authorization process and eventually speeding up payments. The usage has grown steadily.

Voice Payments - After the success of Alexa, financial institutions and FinTechs are in the process of making voice payment the next big thing. Already, many financial institutions in lending are using voice technology through bots to serve the customers. The same will be used to transfer the payments. Voice payments are considered the most seamless, frictionless and most innovative method in the payment industry. To make it more accessible, Amazon Pay, Google Pay, and Apple Pay are in the process to integrate the voice technology.

Face Recognition Technology - Nowadays, face recognition technology is commonly being used for identity verification in smartphones. This technology can similarly be used for making payments. Until now most of the payment technologies were weaved around smartphone or cards. But face recognition payment technology is designed to make payments without mobile phones, or dedicated credit/debit cards. China has already adopted this payment option. Customer needs to stand in front of the POS machine which is equipped with the camera. The camera captures the image of the customer and the payment is transferred. This mode of payment transfer is very quick without any hurdles. This method holds the potential for disrupting the entire payment industry.

Drawbacks
With every good, there is a bad attached to it. Same is the scenario here with the digital payment as well. Relying only on digital payments can sometimes lead to loss of time or even in the loss of your money. The base of digital payment is the internet. Internet and server problems are not certain and inevitable, and if this happens no one can make payments. Digital payment methods can go down due to technical problems. This is one of the simplest drawbacks of digital payments. Another is cyber-attack. Cybercriminals can disable online payment methods or exploit them to steal people’s money or information.

Conclusion
Though there are both advantages and disadvantages of digitalization, let’s hope for the good and expect the best for the digital payment industry of India. With so much of potential for payments, the digital payments scenario of India can only go further upwards.