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Social Innovation

Propelling India’s Digital Payments Revolution to Usher Financial Empowerment

financial empowerment payment gateway solutions
India’s digital payments sector is thriving, enabling the country to leapfrog from a cash-centric economy to a “Digitally Empowered Economy”. Having one of the largest payment ecosystems in the world and a flourishing digital economy, India is poised to become a $5 trillion economy by 20251, with digital payments reaching 1.5 billion transactions a day by that year2.

Even though cash remains the dominant mode of transaction, digital payments are witnessing a massive year-on-year growth. A bouquet of e-payment modes, including Unified Payments Interface (UPI), Immediate Payment Service (IMPS), National Electronic Toll Collection (NETC), Bharat Bill Payment System (BBPS), and Aadhaar-enabled Payment System (AePS) among others, are fortifying India’s payment ecosystem. UPI, instant real-time payment system, hit a record high of 2.8 billion transactions in June 20213, according to data released by National Payments Corporation of India (NPCI), fast-tracking the growth of India’s digital economy.

The digital-first push by the Government and a mission to usher “Faceless, Paperless, Cashless” economy under the robust Digital India programme coupled with increasing smartphone ownership, growing internet user base, entry of fintech players, and technological innovations are powering India’s digital payment revolution. This in turn, is immensely benefitting citizens, giving them easy, safe, and reliable access to multiple digital payment options that enhances their overall Quality of Life.

India’s Digital Payments Landscape

UPI Transactions

2.8 Billion- June 20213

POS Terminals

47.20 lakh- March 20214

Real Time Gross Settlement (RTGS)

₹1,056 lakh crore transaction value- 2020-214

NETC FASTag

157.86 Mn transactions in Volume - June 20213

Bharat Quick Response (BQR) Codes

35.70 lakh- March 20214

Prepaid Payment Instruments (PPIS)

₹1.97 lakh crore transaction value- 2020-214

Immediate Payment Service (IMPS)

303.76 Mn transactions in Volume - June 20213

Card Payments

₹12.9 lakh crore transaction value- 2020-214
Debit Cards- ₹6.62 lakh crore
Credit Cards- ₹6.30 lakh crore

UPI Transactions

2.8 Billion- June 20213

POS Terminals

47.20 lakh- March 20214

Real Time Gross Settlement (RTGS)

₹1,056 lakh crore transaction value- 2020-214

NETC FASTag

157.86 Mn transactions in Volume - June 20213

Bharat Quick Response (BQR) Codes

35.70 lakh- March 20214

Prepaid Payment Instruments (PPIS)

₹1.97 lakh crore transaction value- 2020-214

Immediate Payment Service (IMPS)

303.76 Mn transactions in Volume - June 20213

Card Payments

₹12.9 lakh crore transaction value- 2020-214
Debit Cards- ₹6.62 lakh crore
Credit Cards- ₹6.30 lakh crore



Driving Increased Penetration of Acceptance Infrastructure

For India to emerge as a truly cashless economy, a robust digital payment infrastructure is needed that percolates down to the remotest corners of India, enabling the country to achieve its financial inclusion vision.

Despite remarkable growth in digital payment methods, India still faces an inadequate acceptance infrastructure with small merchants hesitant to adopt Point of Sale (POS) terminals on account of high cost, connectivity issues, and lack of awareness. Compared to other emerging economies, India has a very high density of population per POS terminal - 1 for every 358 people5 - indicating a huge potential for growth of POS terminals in the country.

To scale up the acceptance ecosystem, the Reserve Bank of India (RBI) and Government of India have rolled out several schemes and subsidies to give a fillip to acceptance infrastructure across the country.
01

Union Budget 2021: Rs 1,500-crore scheme to boost digital payments6

02 Payments Infrastructure Development Fund (PIDF) Scheme: Subsidized POS for undeserved areas
03

Digital Apnayen Campaign: Banks to on-board at least 100 merchants and financial inclusion customers per branch on digital payment mode7

04 Digital Payment Security Controls Directions: Proposed by RBI for secured transactions
05 Digital Jagriti: Awareness and access programme for citizens for usage of digital payments modes and supporting merchant on-boarding for acceptance of digital payments
01Transparency & accountability in governance
02Increased tax collection & government revenue
03Data generation for developing alternative credit models to fund Micro, Small and Medium Enterprises (MSME)
04Integrating MSMEs into the formal sector
05Saving of billions in producing & distribution of currency
06Boost India’s economic growth
01 Union Budget 2021: Rs 1,500-crore scheme to boost digital payments
02 Payments Infrastructure Development Fund (PIDF) Scheme: Subsidized POS for undeserved areas
03 Digital Apnayen Campaign: Banks to on-board at least 100 merchants and financial inclusion customers per branch on digital payment mode
04 Digital Payment Security Controls Directions: Proposed by RBI for secured transactions
05 Digital Jagriti: Awareness and access programme for citizens for usage of digital payments modes and supporting merchant on-boarding for acceptance of digital payments
01Transparency & accountability in governance
02Increased tax collection & government revenue
03Data generation for developing alternative credit models to fund Micro, Small and Medium Enterprises (MSME)
04Integrating MSMEs into the formal sector
05Saving of billions in producing & distribution of currency
06Boost India’s economic growth
Empowering
Initiatives
Benefits of Digital
Economy
Empowering
Initiatives
Benefits of Digital
Economy


Besides favorable regulatory norms, innovation in technology is also enabling banks and merchant aggregators to further drive merchant acceptance of digital payments and provide customers with convenient and secure digital payment modes.

As a leading player in India’s financial ecosystem, Hitachi Payment Services Pvt. Ltd., a Hitachi Group Company, is leveraging its top-of-the-line digital payment solutions to drive digital penetration across urban areas and India’s hinterland.

Strengthening the nation’s digital payments infrastructure, Hitachi is providing a comprehensive range of secure and reliable digital payment solutions. In POS, it offers merchant POS solutions, integrated POS solutions and value-added services.

Hitachi is enabling merchants to accept payments through Bharat QR, UPI, and wallet transactions on a single POS device, along with standard card payments. With this, Hitachi is empowering customers by giving them multiple payment options while enabling merchants to accept various payments through a single device.

With pandemic driving payment innovations such as contactless payments for safe and secure transactions, Hitachi is accelerating its adoption by enabling Near Field Communication (NFC) based contactless card payments. Customers can now simply tap or wave their card over the POS machine for making payments, facilitating a faster check-out experience that benefits both customers and merchants.

Meanwhile, the emergence of Soft POS solution, that transforms merchant’s smartphone into a POS terminal, is all set to empower millions of micro and small merchants by enabling them to accept digital payments without investing in traditional POS machines.

Covering the entire payment spectrum, Hitachi’s comprehensive solutions, including Internet Payment Gateway Solutions, Digital Payment Platform (Bharat QR) and Toll & Transit Solutions, enable banks and merchant aggregators to offer innovative and secure digital payment services to merchants and their end customers. Backed by extensive industry expertise, robust payment infrastructure, PAN-India reach and end-to-end services, Hitachi is further driving penetration of acceptance infrastructure and offering a seamless payment experience for the digital natives of a vibrant Digital India.
emi3
Hitachi’s
Digital Payment
Solutions

Point of Sale (POS) Solutions

  • Traditional Merchant POS
  • Integrated POS for large retailers and government institutions
  • Value added services

Digital Payment Platform (Bharat QR)

  • Drives new age digital payment transactions
  • Supports static & dynamic Bharat QR code

Toll & Transit Solutions

  • FASTag payment acceptance at electronic toll plazas
  • Open-loop card-based ticketing system on qSPARC 2.0 (NCMC) standards for metros

Internet Payment Gateway Solutions

  • End-to-end Internet Payment Gateway Solutions
  • Value added services


Powering India’s Digital Economy, Empowering Citizens

While the new technological innovations are surely propelling digital payments forward, a seamless progression in this new digital transformation journey requires building powerful Public-Private Partnership models and collaborative creation between all stakeholders - Government, banks, regulators, merchant aggregators, and fintech startups. Through its Social Innovation Business, Hitachi is committed to strengthening India's payments landscape with a focus on the 3Ps of innovation - Product, Process, and Platform innovation.

Backed by Hitachi’s globally recognized OT x IT expertise, Hitachi Payment Services is providing leading financial institutions and merchant aggregators its state-of-the-art, secure, and agile technology platform that can handle all types of digital transactions seamlessly. Bringing new value and differentiation in this competitive market, Hitachi is providing its customers end-to-end services such as reliable and secure transaction processing, merchant management, risk management, asset management, analytics, settlement & reconciliation services, and field services, to support its partners at each stage of their digital journey.

At the heart of India’s digital payment revolution ultimately lies the citizen who demands better services at the tap of a button across multiple touchpoints - be it at Government offices, fuel stations, restaurants, public distribution system (PDS) shops, and kirana shops. Keeping the citizen at the epicenter of this transformation, Hitachi is advancing social innovation in the payments industry, strengthening both cash and digital payment systems, with a mission to enhance the nation’s Social, Environmental, and Economic values and improve people’s Quality of Life.

Source:

1. https://www.thehindu.com/business/Economy/india-ushering-in-rapid-structural-reforms-to-become-5-trillion-economy-by-2025-goyal/article33535817.ece

2. https://www.moneycontrol.com/news/business/startup/digital-payments-catching-on-will-grow-to-1-5-billion-a-day-rbi-5582551.html

3. https://www.npci.org.in/statistics

4. https://rbi.org.in/scripts/AnnualReportPublications.aspx?Id=1322

5. https://www.deccanherald.com/national/digital-drawback-only-one-pos-terminal-in-india-for-every-358-people-808112.html

6. https://www.hindustantimes.com/budget/union-budget-2021-rs-1-500-crore-scheme-to-boost-digital-payments-101612219947317.html

7. https://www.thehindubusinessline.com/news/national/digital-apnayen-campaign-gives-further-push-to-digital-payment-adoption/article32813200.ece

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