With currency bills carrying virus risk, contactless payments catalyzing economic growth
Coronavirus pandemic is going to change how business is done, how we trade, how we work, how we produce goods, how we learn, how we seek medical services and how we entertain ourselves; and technology will hold the answer to these questions
As the world is adapting to the ‘new normal’ caused by the outbreak of Covid-19 pandemic, technology is going to change in ways more than one. The pandemic is going to change how business is done, how we trade, how we work, how we produce goods, how we learn, how we seek medical services and how we entertain ourselves; and technology will hold the answer to these questions. In the post-Covid-19 world, we will likely see the emergence of a contact-less society, which will transform the way one interacts, ensuring minimal human intervention. There will be a greater focus on the evolution and rapid adoption of new-age technologies in both our professional as well as personal lives, as innovations based on disruptive technologies will assist in social distancing and maintaining hygienic practices.
Since currency bills carry a risk of virus transmission, contactless digital payments, either in the form of cards or e-wallets will become the norm so as to avoid the spread of Covid-19. The pandemic has acted as a catalyst in the growth of digital payments. According to a recent report by consultancy firm Local Circles, 42 per cent Indians have increased the use of digital means for payments in the last few weeks. We are seeing wider adoption of digital payments across Tier2/3 cities as well and it isn’t something confined only to the big cities anymore. Besides, contactless payment volumes are also receiving a boost through the government, which has pledged monetary assistance to the poor via direct transfers to bank accounts.
Concerns around hygiene during the Covid-19 pandemic have spurred contactless payments, as people are now avoiding cash usage at large. In order to adhere to social distancing norms and avoid unnecessary contact as much as possible, there has been an upsurge in adoption of contact-less and digital payments, changing the way we pay and receive money, modifying the traditional way of transaction. Mobile-based payment methods including a bunch of e-wallets along with real-time payment systems like Unified Payments Interface (UPI) have enabled the users to transact without coming in contact with high-risk currency notes.
Three sectors that will drive contactless payments:
1. Online shopping: As more and more consumers will prefer to shop online rather than physically visiting stores, e-commerce is expected to be a major driver behind the rise in digital payments.
2. Transportation and movement of people and goods: The Indian Government has been encouraging RFID-enabled FASTags that ensure seamless and contactless movement of vehicles and goods. Once the lockdown is lifted, we are going to see even greater adoption of contactless payments on our highways as well. Besides, transport modes like metros & railways are also preparing for the new normal which would be driven by contactless payments. In fact, NXP is enabling over 95% of transport ticketing implementations in India through our NFC compliant Mifare technology platform.
3. Bills & utilities: As people tend to stay more at home, the industry has been witnessing a spike in digital payments for bills and utilities. In fact, utilities/bill payments saw a growth of 73% during lockdown, as per a recent report by Razorpay.
A recent study by Capgemini states that usage of digital payments in the post-Covid period is set to be the highest among Indians at 75%, followed by China at 63% and Italy at 19%. The study also suggests that 80 per cent of the Indian consumers older than 66 years of age will increasingly adopt digital payment channels in the next six months compared to a global average of 35 per cent.
See Zee Business Live TV Streaming Below:
The behavioural changes due to Covid19 are going to leave a lasting impression on how we live. We will be seeing a new normal where people will prefer to go for contactless payments even after the threat of Covid19 subsides, not only due to greater awareness around hygiene factors in the fight against Covid-19 but also because of the greater convenience that many of the first-time users of digital payments will experience in the coming times.
By Sanjay Gupta, Vice President and India Country Manager – NXP Semiconductors
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.