Contactless Payments – The new normal for indian businesses

18 / 09 / 2020

Amidst a severe global recession, businesses are adapting to the 'new normal' by implementing safety standards. Contactless payment systems have emerged as a practical solution for minimal contact transactions.


COVID-19 has put all of us in a bind.

The global economy is experiencing the worst recession in decades and despite the efforts of governments across the planet, the situation is not likely to improve anytime soon. In this ‘new normal’, businesses have been compelled to incorporate varied safety standards to resume operations. This has impacted day-to-day activities, business decisions and even modes of payment while transacting. In India, like in other countries, the survival mantra now is social distancing and minimal contact. With government guidelines in place, businesses are, therefore, exploring simple and innovative solutions that could help them achieve this. Considering the situation, contactless payments systems are one of the most practical solutions that organizations are adopting.

Consumers and contactless payments

Contactless payments are not a new innovation; but the pandemic has accelerated its adoption and made it practical, safe and convenient for Indian businesses and consumers. According to a global survey, about 77% of Indian consumers believe that the shift to contactless payments is here to stay. As per the survey, many Indian consumers are keen on remaining cashless even after the pandemic as they felt that contactless payments are a safer and faster method of payment which has allowed them to move in and out of shops faster. In the COVID situation, be it grocery shopping, medicine, OTT players, recharges, or bill payments, almost all payments now happen digitally. UPI, Net-banking, Digital wallets, QR code scan, A2A payments, Contactless payment cards - today, consumers have many payment modes to choose from.

With digital payment services incorporating such contactless payment methods, businesses are now at a huge advantage. From improving speed of transactions to providing better customer servicing opportunities for merchants, the introduction of contactless payments has proven to be a great advantage for small and medium businesses in many ways. Every kind of industry, be it specialised ones like automotive industry or small businesses such as grocery stores, courier and delivery services, have gained the most out of this new wave of contactless payments as it helps provide a frictionless payment experience. Cashless payments have also helped improve customer service and retention as businesses can now serve faster, cutting down on the waiting time. Moreover, contactless payment methods are known for their security features. Protected by multiple levels of encryptions, these methods guarantee safe transactions. Alongside, this mode of digital payment also provides better accessibility and is supported by multiple devices, offering flexibility and wide-scale usage for businesses as well as customers. According to a report, about 65% of people under the age of 35 are comfortable using payment services on mobile devices.

As more and more customers prefer contactless payments, Indian businesses have upgraded their systems to offer contactless payment services for all their customers. Since the introduction of demonetisation, the Indian government has promoted digital payment mediums like AePS (Aadhaar Enabled Payment System) and UPI (Unified Payment Interface), leading to increased acceptance of contactless and cashless transactions. By waving off the need for two-factor authentication for transactions less than Rs. 2000, the government has taken steps to encourage contactless payment. Along with this, the Ministry of Urban Development has released the National Common Mobility Card (NCMC) guidelines with the vision of having an inter-operable transport card that can function across all open loop payment models.

Going contactless – The business side of it!

As a business, there are few things that you must ensure before prepping for this change. The biggest and probably the most important step towards adopting this process would be to equip your business with the necessary tools that support contactless payments. For example, in auto workshops and service centres, where vehicles are driven-in and picked-up by drivers on behalf of the owners, creating a secure payment method for the owners who are not physically present becomes a challenge. Brands offering digital payment services have overcome this adversity with the help of a payment link solution, which can be used to send a safe payment link to the customers via email or SMS. This link-based payment solution is designed to provide convenience, and in situations like the pandemic we are currently battling, safety for customers and employees. By enhancing the features of contactless payments virtually, service providers have opened new avenues for real-time payments for businesses and customers. Along with this, digital service providers have helped improve scalability of payment services by enabling businesses to send links in bulk. This way, conversion and retention of customers has improved.

As the Indian economy tries to revive itself and allows more businesses to re-open, contactless digital payments will help ease transactions. With the added advantage of a growing industry ready to back contactless payments solutions, businesses can improve their delivery processes and offer tailored and customer-centric services. It will help build trust, ensure secure transactions, strengthen customer loyalty, aid in improving overall sales, and provide small and medium businesses with the chance to recover post COVID-19. However, in a post COVID-19 time, where contactless payments are bound to become a way of life, ease and reliability of carrying out a transaction will prove to be a competitive factor. As a business therefore, it will be crucial to pre-empt this revolution and take the first step towards building a contactless payment ecosystem.

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Ramesh Narasimhan

Head of Digital Commerce, Worldline India
As a Chief Executive Officer of Worldline India, Ramesh is responsible for leading the business strategy and driving the revenue growth of the company. He has over three decades of experience in various roles in the Information Technology industry, having worked with various companies like HCL and IBM, - where he performed diverse leadership roles.