Navtej Singh, CEO of Digital Business, Hitachi Payment Services

Digital payments ecosystem in India needs to evolve rapidly to help shape the post-COVID era. “Innovations such as Soft POS that enables merchants to accept payments via their smartphones, SMS link-based payments, digital onboarding of merchants, and servicing the merchant payment-related requirements through mobile apps are driving acceptance of digital payments,” says Navtej Singh, CEO of Digital Business, Hitachi Payment Services. With over 55,000 ATMs (includes Cash Recycling Machines), 3,500 White Label ATMs and 1.3 Million POS devices (includes mobile POS & QR) besides Toll & Transit Solutions across the country, Hitachi Payment Services has been contributing to the development of payment infrastructure in India. In an email interaction with CXO Outlook, Navtej Singh talks about the opportunities for the FinTech firms in the future, the impact of COVID – 19 on the payments industry, future of digital payment industry in India and many more. Excerpts.


What is Impact of COVID – 19 on consumer behaviour in terms of payments in India?

In India, we have experienced remarkable growth in digital payment transactions in the last 4 – 5 years.

The ongoing situation has further enabled the adoption of digital payments, and the same has been reinforced among customers. Amidst COVID – 19, from a safety and security standpoint, we are seeing a growing customer propensity towards contactless payments. The current situation has not only helped in bringing new customers on board but have also impacted the way the customers make day-to-day payments. A significant shift in consumer behaviour and habits have been observed – small ticket payments like day to day transactions at Kirana stores and other spends on essential items which were primarily done through cash earlier are now moving to digital.

According to a recent Capgemini report, before the pandemic, only 57 per cent of Indian consumers were interacting on mobile apps, which has now jumped to around 67 per cent. There is a definite shift in consumer behaviour in terms of adoption of digital payments, and it will only continue to grow.

The digital payment landscape in India has been growing. How did nationwide lockdown catalyze this growth? Tell us about the trend you observed in the adoption of digital modes for transactions.

India with multi-fold growth has undoubtedly moved mountains in the payments’ arena, and digital payment channels are continuing to thrive. Unfortunately, Digital Payments gets a push only when there is a ‘stress element’ such as that of Demonetization in 2016. Demonetization pushed India’s need to move towards digital and Covid-19 will accelerate the transition into a less-cash economy in the long term.

With the nationwide lockdown and COVID – 19 impacts on consumer behaviour, there has been a shift towards digital payments with new customers adopting various digital modes of payments and a general increase in digital payment transactions.

We have seen online sales and e-commerce payments surge over the last few months, particularly for essential items, and there is an increase in small ticket payments, such as transactions at Kirana stores. Use of contactless digital payments like UPI based transactions, QR based payments, contactless card payments as well as e-wallet transactions has seen a rise owing to the convenience, speed, and safety that it offers.

Every financial activity is being upended by new technology. How are innovations and advancements in the technology helping digital payments to be more seamless and convenient?

Over the past few years, there has been a continuous push for the adoption of digital payments from the government and the regulators through various initiatives spanning infrastructure, literacy and ease of accessing digital payment services. The NPCI’s Unified Payments Interface (UPI) platform and the National Common Mobility Card (NCMC) program have further contributed to the widening of the digital payment’s ecosystem.  With the RBI pushing for card payments to go contactless, allowing transactions of up to Rs 2,000 through tap and pay without an authentication such as PIN, contactless payments have also seen a rise. RBI has also permitted contactless payments above Rs. 2000 with PIN authentication.

Innovations such as Soft POS that enables merchants to accept payments via their smartphones, SMS link-based payments, digital onboarding of merchants, servicing the merchant payment-related requirements through mobile apps are further driving acceptance of digital payments.

At Hitachi Payment Services, we are aligned to the Government’s Digital India vision. We are continually focusing on technology-led innovations enabling digital payments to be more secure, seamless and convenient while continuously expanding the reach and making digital payments accessible for the masses. Hitachi Payment Services’ Tap & Pay solution enables contactless card payments using Near Field Communication (NFC) technology. Our Open-loop card-based ticketing system on NCMC standards for metro train payments and enabling of FASTag payments at toll plazas have transformed the fare collection process while providing commuters with a safe and seamless payment experience.

Hitachi Payment Services’ state-of-the-art and future-ready digital payment platform also drive POS transactions, E-commerce transactions, Bharat QR, as well as UPI transactions.

What are the trends in terms of merchants and the total number of daily transactions during the lockdown time?

Generally, consumers and merchants have been affected alike, with isolation and social distancing measures in place. Merchants offering essential services such as food, grocery, medical supplies, milk, etc., have seen a rise in their digital transactions.

Considering the current situation of Covid-19, small retail outlets, neighbourhood Kirana stores and small vegetable & fruit vendors seem to be now accepting digital payments as customers are keen to make payments digitally due to the lockdown restrictions as well as from a safety standpoint.

Soon, we expect digital payment transactions to grow multi-fold owing to new merchants being onboarded, increase in new customers and an increase in a number of transactions per customer.

Tell us some of the significant developments in the digital payment sector that everyone needs to look forward to. What are the opportunities for fintech firms in the future?

The economic disruption caused due to the pandemic has highlighted the importance of serving people who are currently outside the formal financial system. Advancing financial inclusion programs will play a vital role in bringing in more of the unbanked populace within the banking ecosystem.

While there has been a lot of developments on the issuance or the consumer side, we feel there are considerable opportunities on the acceptance or merchant side that can deliver innovation and value for the merchant – a key player in the payment ecosystem. This could be in the areas of providing cost-effective and innovative acceptance infrastructure as well as in the areas of Artificial Intelligence and Big Data that can drive additional revenue for the merchants.

Another important outcome of COVID-19 for FinTech may well be the continued acceleration of partnerships with financial institutions, other FinTech and biotech to innovate and accelerate digital payment services. Hence expanding partnership strategies and exploring new use cases would open up more opportunities for fintech firms in the future.

IoT is also a significant opportunity for fintech firms in the future. COVID-19 may accelerate the adoption of IoT-enabled contactless payments offering multiple growth opportunities.

In your view, what is the future of digital payment industry in India? What is some advice that you have for the companies that are emerging in this space?

The nation’s tech-savvy demography – 1.2 billion mobile phone connections, 560 million internet subscriptions and over 350 million smartphones serves as the fulcrum of an inclusive digital transformation. India’s digital consumer base is the world’s second-largest, as well as the second-fastest growing among 17 major economies as per a report released by the Government of India’s Ministry for Electronics and Information Technology.

Considering the low penetration of digital payments in the country, there is considerable opportunity for players to grow. While companies drive innovation on the consumer side, it is equally important to focus on the merchant side to drive adoption of digital payment systems at the merchants’ end.

Contactless payments could be the way ahead, and payment modes like UPI, IMPS, QR Code based payments and mobile payments would contribute to the growth of digital payments. Services like bill payments and spend on essential daily services will mostly go digital. The industry shall accelerate self-service and automation initiatives around payments. Options which will dominate the future and play a vital role in driving digital payment acceptance across India include Biometric authentication, Tap-and-Pay payments, Voice Payments, Facial-recognition payments and many more.


More About Navtej Singh

Navtej Singh is the Chief Executive Officer – Digital Business of Hitachi Payment Services. Navtej has over 20 years of experience across financial services in Payment Solutions, Product & Channel Management, Retail Branch Banking & Sales. Before joining Hitachi Payment Services, he set-up BizStrat, a business & strategy consulting firm, advising various ecosystem participants on Product Strategy, Partnerships and Distribution structure.

Before BizStrat, Navtej managed key revenue verticals for leading financial institutions including National Payments Corporation of India (NPCI), HDFC Bank, Centurion Bank of Punjab, Citibank and DCB. Navtej is credited with creating and managing one of the most profitable Direct Payments Businesses with market leadership in key segments with HDFC Bank. With NPCI, he has played a pivotal role in defining and building the business development and marketing strategy, including product development and setting up of sales process for a niche product – RuPay Platinum Debit Card. An industry representative on various RBI working groups and discussion forums, Navtej was also a member of the RuPay Steering Committee and was Chairman for the India chapter of Prepaid International Forum, UK.

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