Industry experts predict what digital payments will look like in 2023

By Puja Sharma

India is in a strong position to become the global leader in FinTech innovation, with a thriving ecosystem of startups and established companies driving innovative financial solutions. A robust tech stack, combined with the Jan Dhan Yojana and the surge of UPI, has opened doors to endless opportunities to spur innovative offerings and services in FinTech.

Akash Sinha, CEO & Co-Founder, of Cashfree Payments covering a brief evaluation of the year 2022 and the anticipated trends in 2023, concerning digital payments,

Here are a few trends that can drive this progress in 2023:

• Offline digital payments gain traction: 

The introduction of offline digital payments such as UPI 123pay will increase person-to-merchant (P2M) and peer-to-peer (P2P) transactions via payment apps. This will exponentially increase the financial awareness for users even from the remotest regions, making them a new customer segment for businesses.

• Increase in cross-border payments:

Homegrown payment solutions will gain further acceptance in foreign markets, increasing cross-border transactions. NPCI’s efforts in expanding UPI in markets such as Europe, Belgium, Netherlands, Luxembourg, and Switzerland will act as a growth catalyst. Recent initiatives, such as allowing Non-Resident Indians (NRIs) to directly make payments for their bills using Bharat Bill Pay System (BBPS), will accelerate this process.

• Increased adoption of BNPL: 

In 2023, we will witness an increased collaboration between banks, NBFCs, and payment networks, giving access to credit to a largely underserved market and creating a new customer base. Segments offering BNPL will go beyond electronics, mobiles, and groceries, extending to essentials, healthcare, online education, insurance, and travel.

Banking as a Service (BaaS) has emerged to be a powerful avenue to boost the reach of financial services. We are witnessing a rising focus on convenient banking and the utilisation of tech-led innovation. Considering the efforts will increase in 2023, we will undoubtedly move closer to the aspiration of hassle-free bank account shifting, just like changing mobile phone service providers. It goes without saying that we are entering an exciting phase wherein FinTech and digital payments will become force multipliers in India’s financial inclusion endeavour.”

Anand Kumar Bajaj, Founder, MD & CEO, PayNearby said, “Driven by greater convenience, favorable government policies, and evolving consumer sentiments, Bharat is gearing up to walk hand-in-hand with India. This has brought a behavioral shift in consumers, with more and more citizens adopting assisted digital means for their banking and lifestyle requirements.”

“Services that were earlier limited to metros and tier I cities are now easily accessible in tier II regions and beyond. Reiterating this is the sharp growth of over 200% in our cash collection business including collection from logistics and e-commerce companies Also, we witnessed a growth of 263% in micro-credit for MSMEs which demonstrates the unmet demand for credit, being tapped by FinTechs like us,” he added.

Aiding this growth are our retail partners and the local kirana stores, which have evolved into a multi-utility point for consumers to meet their financial and digital needs. For India to transition to the next stage of development, we will continue to strengthen our efforts to simplify high-end technology so that more services can be sachetized and democratized and made available to all through our well-entrenched DaaS network. Come 2023, with our grit and determination, we will continue to hustle and innovate to bridge the urban-rural divide and build an inclusive India, together.

“The year 2022 has been positive for the digital payments industry. There has been a significant push by the Government and the Central Bank to promote innovation and competitiveness in the ecosystem. Transactions through Unified Payments Interface (UPI), Aadhaar-enabled Payment System (AePS), Immediate Payment Service (IMPS), etc. have witnessed sustained growth, especially across the semi-urban and rural regions of the country.” said Mr. Mandar Agashe, Founder MD & VC of Sarvatra Technologies. 

“This indicates the behavioral shift in the way Indians are making their payments for both financial and non-financial transactions. In rural India, AePS has emerged as a favorite mode of transaction as the average usage reached more than 11 million per day indicating how the larger rural population in India is migrating to digital modes of payments (including remittances),” he added.

The next year is going to be the year of fintech companies inventing better products as per changing needs of the users. There is scope for better adoption of new-age technologies, such as cloud computing, big data, and AI-based solutions. Payment platforms such as BBPS and UPI going international will make cross-border payments faster. Many infrastructural developments such as CBDC and digital wallets are spaces to watch out for in 2023. Fintechs have a responsibility to create innovative payments solution that is also safe from data threat and provide convenience to users.”