A numerate at heart, Balaji Jagannathan is a driven entrepreneur who is extremely methodical, systematic and meticulous. The co-founder of Paycorp.io, Balaji has had an exemplary career for over two decades in the global payments space. His unique skillset combination of software product development, cost accounting background and banking eventually led him to foray into the banking and payments automation domain. Armed with strong insights pertaining to banking across different geographies, Balajialong with the other co-founders of the company, zeroed in on banking payments as the growth segment that sought deep hands-on experience to identify pain areas and solve them.
It is the experience of almost every Indian with a smart phone in hand today that he/she need not use cash at all to pay anyone. Cash is virtually eliminated from common use in many parts of India, particularly urban and semi-urban India.
The payments technology has transformed at breakneck speed in the last few years that within a span of 3 years every payment, be it small value consumer payment, high value payment or recurring B2B payment can be made instantly, anywhere, anytime.
Before the payments revolution began, India like most other countries has relied on credit and debit cards for all consumer transactions other than cash transactions. Cards were considered the most convenient means to pay. Cards also were a status symbol. However cards were expensive and prone to fraud and security breach. Most countries still rely on cards as the most preferred means of payment. However India has marched ahead. India has changed the payments landscape beyond recognition in the last few years that there are only a few other nations that can match. The UPI payments has crossed 25 billion transactions a year mark to become the largest transaction volume in the world. Even the mighty china has no match to this volume. Let’s look at Indian payments landscape with a few different parameters of relevance to the consumer.
Cash payments used to be the quickest means of payments for small value across the counter payments, until QR codes based UPI payments entered the scene. Cash is the universal medium which was accepted by all. If another mechanism has to even match with cash, it has to be as quick and as ubiquitous (most accepted / prevalent) as cash. UPI payments with static QR codes has made this possible. Standardized QR code formats across UPI apps, with zero technology requirement at merchant counter (just print and stick the QR code) ensured that merchants across the country can seek payments in UPI form and any payer with a smart phone can make the payment.
Merchant at the counter spends 40% of his work hour calculating the transaction value, counting the cash received and confirming receipt. UPI based payment frees up 40% of merchant time with which they serve more customers, faster. The efficiency has directly resulted in improved business to the merchant.
Payments technology has proliferated far beyond low value across counter payment. Innovation has been the massive offshoot of the evolution of national level payments technology. Take the case of Buy Now Pay Later (BNPL) . Business have identified that emerging from the COVID impact, consumers need to buy more in shorter duration to sustain their standard of living, however they may not be able to pay immediately. This has given rise to a whole new business segment of BNPL. BNPL is entirely a technology driven business model. It provides a significant uptick to businesses, tapping into consumers near term ability to repay.
Scenarios exist where we want to deliver a specific service to a specific individual. For example, Imagine vaccination. Government may want to deliver targeted vaccination to specific groups (60+, 2nd done only etc.). Instead of distributing cash / pay into the account of individuals, today, Govt can issue eRupi vouchers to the individuals. The voucher will be valid only at the specific health centre for the delivery of a specific vaccine to that individual only. Today’s payment technology infrastructure makes such highly targeted delivery of value possible.
We all pay our utility bills each month. We all pay our subscriptions each month. We all have felt the frustration of missing the payment amidst our schedule. Recurring payments have existed for so long. Yet we have not used it till recently, simply because it was manual and cumbersome. Now the setting up of recurring payments through ACH mandates has become so convenient that it is as easy as making a UPI payment itself. It frees us all from the hassle of repeating all those regular payments each month.
Payments technology has gone through strategic evolution at a national scale in India that it has not only touched every Indian life positively, but it has also paved the way for rapid paced evolution. It has also laid the road for rapid economic development of the country.