In 2022, organizations across the globe have witnessed an increasingly unpredictable environment – changing return-to-office policies, evolving consumer behavior, and higher-than-usual employee turnover, to name a few. But on the consumer side, the safe return of in-person shopping paired with the parallel rise of the e-commerce industry has made buyers stick to the convenience of online payments.
The open numbers revealed that the digital payment volume in our country has risen at a 50% average annual rate over the past five years – one of the fastest growth rates in the world (IMF).
The global popularity of UPI and its remarkable growth in the home country shows how the consumers have complemented the effort of the Indian government. It is also the epitome of the cooperation between private fintech firms and the central bank to boost digital payment adoption.
While both consumers and merchants have displayed great affinity to embrace digital payment technology, many of you would want to know the payment trends they can expect to see over the next 12 months.
Let’s dive deeper into the path that is expected to peep into the future of digital payments in the country.
5 payment trends to watch in 2023
Convergence of offline and online payment methods
While you can see customers returning to the brick and mortar stores, you might have also witnessed the changed preference in the way they used to pay for goods and services.
Along with paying for things in cash, they now ask the merchants about the presence of frictionless payment methods. With the expected smartphone users in India to reach around 1 billion this year, this could be expected. Also, online payment methods reduce a few steps in the buying process. Buyers can now place an order online and pick up the items from nearby brand outlets.
With more and more people willing to make online payments, the ease of paying for things the way they want while also enjoying the convenience of the brick and mortar experience can be the next big thing. This is where merchants like you need to prepare themselves with online and offline payment methods to prevent any customer from leaving your store without buying.
Growth of digital wallets
In India and across the world, paying by phone is a convenient way for buyers to make purchases quickly both online and offline. If you look at the volume of digital-wallet-based transactions in Mar 2022, the numbers increased by 20% y-o-y to 5,017 lakh and followed the upward trajectory in the next few months (Source: RBI).
With the availability of digital wallets like Paytm and their omnipresent reach, the numbers given above are quite justifiable. They have become a common fixture along with other traditional payment options available for customers to make payments.
The usage of digital wallets as a preferred payment source can be expected to grow further in the coming months. But if you, as a business owner, want to benefit from this trend, you must start accepting payments through digital wallets. Not giving your customers the option to pay you via a digital wallet can lead to a loss of customers and potential sales, irrespective of the type of business you run.
Recommended Read: How India Paid in 2022: An Annual Overview of Digital Payments
Payment apps to become the new lifestyle apps
From ordering food online to booking flight tickets and more, consumers rely on digital payment apps for almost everything. It is because what once popped up as a simple payment app has grown its wings to become a super-app that covers almost everything – be it booking movie tickets, train tickets, making utility bill payments, and recharges.
In fact, advanced payment apps like Paytm represent a closed ecosystem of many apps that consumers use in their everyday lives. They offer a seamless, integrated, and efficient customer experience which tends to retain customers along with attracting new ones. In the coming months, you can expect these apps to grow further in usage as lifestyle apps in the country.
|Whether it is about paying bills or a child’s school fee, making investments, or asking for a personal loan, Paytm has the consumer needs covered. For merchants, there is Paytm for Business.|
Customer retention, being a significant challenge for every business type, can be dealt with using these payment apps.
Further rise in Buy Now Pay Later financing option
The financial uncertainty during the pandemic has exploded exponentially and allows the customers to make payments for the current purchases to a later period. The buyers can either choose to pay the total amount at a later date or spread the payments into monthly installments.
The Buy Now Pay Later (BNPL) financing option has been a win-win at both ends. Buyers can purchase expensive items without breaking the bank while brands can count on higher conversions by asking for lower initial payments. The growth of BNPL payments is expected at a CAGR of 28.9% during 2021-28 (Source).
Also, the use of BNPL payment options is expected to be around 24% of all e-commerce transactions by 2026. To leverage the rise of BNPL, 65% of merchants added BNPL as a payment option in the last year.
This payment trend is expected to continue its impact on both merchants and customers in 2023.
Also Read: All You Need to Know About Buy Now Pay Later in India
Rise in adoption of QR codes
QR codes seemed to fail in attracting people to make online payments before the pandemic. But when everything came back to normalcy again, various businesses tried to focus more on sustainability than growth and included QR codes as a way to adopt digital payments.
Nowadays, QR codes are prevalent almost everywhere. In restaurants, visitors can view the menu by scanning the QR code pasted on their table and paying for their meal online. Similarly, small and big offline stores now accept payments by allowing their customers to simply scan a QR code. One of the reasons behind its popularity is that a customer can skip long queues by scanning the code and getting their products easily.
The statistical information says that QR code payment users are expected to grow beyond 2.2 billion in the next two-three years. If you still do not have a QR code placed at your store to accept payments, click here to get started.
Payments trends are here to stay
The evolution of transactions from solely being in cash to online payments signifies that more and more Indians are trusting digital payments and using them in their daily lives. In 2023, consumers will expect businesses to give them digital payment options to pay, which is where business adaptation is essential.