Mumbai: With the rapid proliferation of the Internet, e-Commerce has witnessed widespread adoption in India, posing stiff competition to local kirana shops and small retailers. That said, a sizeable percentage of Indians continue to prefer physical stores over online shopping platforms. One of the primary reasons behind most Indians’ inclination towards shopping offline is the comfort of getting a first-hand experience of the goods before purchase. However, with most customers being pressed for time, it is imperative for offline stores to change their mindset and embrace technology to elevate the customer experience, and ease shopping transactions. Offering a seamless payment experience is one way of doing this.
Consider this – a study in the US by technology company Adyen found that 79 percent of shoppers have left a store due to long queues, and 10 minutes is the average time that a customer typically waits to make a payment. Besides the fear of losing customers owing to a long wait time, merchants are further burdened by the additional cost of managing large quantities of cash and disbursing change. While all these elements impact the profitability of a merchant, technology advancements and innovation are gradually driving a shift in how consumers pay, and merchants receive payments, in India.
With more than 30 lakh PoS devices deployed across the country – which is significantly more than the pre-demonetization numbers – there has been a sharp increase in in-store card payments. One such form of card payment, which not only improves the payment experience for customers but also helps in quick-turnaround at the cash counter, is the contactless card. By eliminating the need to swipe the card and enter PIN number, for a transaction value of up to Rs. 2,000 in India, contactless cards make payments for small ticket items and services a breeze for customers. On the other hand, for merchants, with its simple tap and pay option, contactless cards can help not only save on the cost of managing cash, but also potentially achieve higher footfalls by drastically reducing customer wait time and improving the overall shopping experience.
“Around the world, merchants are reaping the benefits of deploying contactless technology. Our study in Australia shows that 41 percent of retailers witnessed an increase in sales by introducing the contactless payment method, while 68 percent benefited from the improved speed of service. We are confident that adoption of this method will aid merchants in our country who primarily undertake small ticket transactions, and always face the issue of managing cash and disbursing change,” Visa Group Country Manager for India and South Asia, TR Ramachandran, said.
An additional benefit for merchants in offering a contactless payment method to customers is the reduction in cash handling time, thereby freeing up resources for something more cost-effective than going to the bank and depositing the cash. It also reduces the worry of cash theft or loss.
As futuristic as the underlying technology may sound, contactless payments have been around for over a decade, and have advanced remarkably over the years. Here in India, out of 963 million payment cards in circulation, around 15 million are contactless. Recently, the Finance Ministry has directed banks to issue contactless credit and debit cards to their customers, further increasing the number of cards in circulation. The industry has also made significant investments to strengthen the contactless payments ecosystem, and is working towards increasing the touch points that accept contactless payments. The majority of EMV-compliant PoS terminals shipped to merchants in the past few years come equipped with the ability to accept all types of contactless payments, from ‘tap-and-pay’ credit and debit cards, to even mobile payments.
As offline merchants across the country continue to face-off against e-Commerce giants, contactless payments can truly be a game changer that can help brick and mortar shop owners provide their customers with a seamless shopping experience, giving them another reason to shop at their neighbourhood store over an e-Commerce website. In the long run, this will help merchants witness an increase in their customer loyalty, resulting in frequent repeat business and more opportunities to cross-sell.