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UPI, Credit to further drive digital payments in e-commerce: Experts

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According to experts speaking at the Internet Commerce Summit, international adoption of UPI, increase in transaction limits and credit offered by e-commerce players are the hallmarks of the digital payments evolution

Bengaluru: Notable changes are on the cards for Unified Payments Interface (UPI) including adjustments of payment limits and internationalisation of UPI which will further drive digital payments making cross-border transactions easier, driving cross-border e-commerce, said Prakash Venkataramani, senior director of global payments at Flywire.

“Anticipating significant developments, I foresee notable changes on the UPI platform and within the National Payments Corporation of India (NPCI),” said Venkataramani. “One of them is the focus on adjustments to payment limits within NPCI. There seems to be a strategic push towards internationalisation of UPI, with connections to platforms such as PPRO in the UK or Pay Now in Singapore. A potential surge in usage is expected with the increase in transaction limits,” he added.

Adding to that, Saksham Bhagat, co-founder and chief executive officer of the financial service portal Swift Money, said that credit too will have a great impact on e-commerce.

Elaborating on the same Bhagat said, “When consumers use a credit card for payments, the buy now pay later system alters their mindset.”

Citing an example of the cab aggregator company he owns, he said that there was a significant shift after introducing the credit system. “Prior to that, people were hesitant to book online, preferring to make calls. Today, approximately 70% of our consumers prefer online bookings, highlighting the transformative effect of credit in changing consumer behaviour,” he observed.

Bhagat and Venkataramani were speaking at a panel discussion titled ‘’Money Talks! Digital Transactions Translated for Tomorrow’, which was part of the IMAGES Group’s Internet Commerce Summit. Aditya Kumar, the co-founder and CEO of Niro, an embedded consumer lending platform, served as the moderator of the engaging session.

The discussion covered a range of topics, such as cross-border payments, the retail role of credit cards, the significance of seamless payments across platforms and much more.

Venkataramani emphasised that the landscape of commerce has undergone a significant transformation in countries experiencing the growth of real-time payments. Pointing to Singapore as an example, he highlighted that Pay Now has become an integral component of every transaction in the country.

Speaking about online sales, Bhagat highlighted the three elements that act as a catalyst in online sales.

“When engaging in online sales, three key components act as salesmen. Firstly, there’s the advertisement, which serves as the gateway through which the brand attracts consumers to the app. Secondly, the user experience plays a crucial role in ensuring a positive and seamless interaction. Thirdly, the focus shifts to making payments easier and quicker, minimising the time for second thoughts,” said Bhagat.

“For example, in the case of Zomato, if a card transaction fails, it seamlessly transitions to cash on delivery. The observable increase in consumer spending over the past few years serves as evidence of the effectiveness of this third element in facilitating payments,” he added.

According to Venkataramani from Flywire on cross-border payments, the calculation of taxes in cross-border payments has undergone significant revisions in India, reflecting the government’s keen interest in closely monitoring these transactions to gain insights into the nature of payments and the parties involved. Recently, the government implemented a 20% increase in taxes on cross-border payments, with the exception of those related to education and medical expenses.”

Addressing the desired improvements in payment systems in India, Venkataramani expressed, “I anticipate the expansion of UPI integration across diverse platforms. Additionally, I foresee simplification in cross-border payments, with a reduction in the number of required documents for upload. There’s an expectation of an increase in taxes. An intriguing trend emerging in India is the rise of super apps, akin to the WEchat app in China.”

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