What is Digital Payment and How a Payment Gateway Can Enable it

what is digital payment

The rise in digital payments has remarkably influenced the way businesses and consumers transact in India today. 

Cash payments are being increasingly replaced with online transactions. From the most valuable purchases to everyday essentials, the switch to digital payments in recent years has been unstoppable.

In the financial year 2022, around 71 billion digital payments were recorded across India – a significant increase compared to the previous three years. 

A number of government policies that encourage digital innovations as well as the rise of fintech companies with breakthrough solutions have largely contributed to this shift.

Digital payments (also known as electronic payments) are only going to get better and if your business has not yet fully realised their potential, this article talks about the advantages of digital payments and throws light on the importance of a payment gateway in enabling them.

What are digital payments?

Digital payments imply transactions carried out through a digital interface without the involvement of hard cash. The exchange of money can take place through multiple devices such as a mobile phone, a computer, credit/debit card and so on.

In simpler terms, digital payments are enabled when someone receives or sends money from one bank account to another through a digital device such as debit or credit cards, mobile, and computer.

However, apart from the device, it is also important for both the payer and payee to have a bank account, online payment modes and the presence of a service provider that seamlessly processes the payments.

Digital payments can be entirely virtual through the internet ,or done offline in person. For instance, shopping for electronics from an online store (virtual) or buying groceries from a local shop where the consumer transfers money through a digital device instead of cash.

In the financial year 2022, digital payments in India amounted to over 1.7 quadrillion Indian rupees in total. This was a significant increase compared to the previous two years when the total value stood above 1.4 quadrillion rupees.

What are the benefits of digital payments?

Instant transactions: The swiftness of digital payments is one of its most appealing features. It is particularly helpful in the long billing queues whether it is at a retail store, ticket counter or even a bank. 

Electronic payments considerably reduce the time taken transacting when compared to cash exchanges. Moreover, with QR codes and contactless cards, billings are even faster.

Secure and transparent: With stringent security measures in place, digital payments are extremely reliable. Businesses can enable notifications and access details to know the status of the payment. 

Human interference is almost eliminated and hence chances of data errors, theft or misappropriation of funds are also reduced. 

Continued growth: In 2020, 53 per cent of India’s total population accessed the internet from their mobile phones. This is expected to grow to 96 per cent by 2040. The result is more and more people using digital payments. 

Businesses are able to drive their own growth as well by reaching out to a greater number of people irrespective of their location and without having to worry about the hassles of payments.

Simple and convenient: Digital payments can be successfully processed from any location and at any time. This is a huge benefit for e-commerce stores since it implies that they are open 24/7 for business.

For consumers too, digital payment happens with a few clicks and offers multiple options for transactions. Not just payments but refunds are equally simple with digital payments.

Easily traceable: Tracking the income, spends, taxes and everything else related to transactions is easily accessible with digital payments.

Since the processes are automated all records are available in a single place, making it easier for businesses to trace and evaluate their finances.

UPI comprises 60% of total payments by volume and digital payments have risen from $61bn in FY16 to $300bn as of FY21. Given increasing online purchases and digital adoption, this is expected to grow to US$0.9-1tn by FY26, or 30% of Indian consumption.

How does Paytm Payment Gateway enable digital payments?

A payment gateway is a tech-enabled solution that helps online businesses accept payments on their website/app. 

It essentially manages the transfer of money from the customers’ account to the business through a series of complex steps.

In today’s competitive market and a digitally-driven economy, it is inevitable for enterprises to employ a robust and reliable payment gateway that enables seamless digital transactions.

Paytm Payment Gateway brings together several business-centric and customer-focused features to enable seamless payment on the website/app.

Here’s a look at how Paytm Payment Gateway simplifies the digital payment system.

Quick integration: Paytm Payment Gateway’s fully online onboarding process with powerful APIs and custom SDKs activates digital payments on your website/app with minimum documentation. It also offers plug-in support for e-commerce platforms such as WooCommerce and Magento.

Multiple payment options: With options such as credit cards, debit cards, net banking, EMIs, and UPI, Paytm Payment Gateway supports 100+ payment sources. Customers can also transact through Paytm Wallet and Paytm Postpaid.

Merchant discount rate: Paytm Payment Gateway does not charge a Merchant Discount Rate (MDR) for payments done through UPI and RuPay cards. Moreover, there is no cost incurred by you for setting up and maintaining the payment gateway.

Fastest settlements: The settlement cycle by Paytm Payment Gateway is T+1 which is the fastest in the industry and is irrespective of weekends or bank holidays. Businesses are also offered other options such as real-time settlements and batch settlements based on their needs.

International payments: Paytm Payment Gateway lets merchants accept payments in 100+ currencies without the need for separate API integration. This feature is very helpful for businesses that plan to expand and target a global audience.

Conclusion

The process of digital payments from a business’s perspective is highly interlinked with customer experience. While electronic payments come with myriad benefits, a business needs to ensure that the transactions are also seamless and hassle-free.

One way of solving this is by using a payment gateway that is equipped with modern tech and can effectively enable smooth payments. Paytm Payment Gateway does all of this making it the preferred choice of startups as well as unicorns for their digital payments.

 

Switch to Paytm Payment Gateway

You May Also Like
Accept Payments at Zero fees
Read More

Accept Payments Online at Zero Fees with Paytm

While there is no extra cost associated with making online payments on the consumer side, businesses need to pay certain charges. That’s the reason why they look for ways to accept payments at a 0% fee.