Payment Gateways

Future Trends in Payment Gateways in India

‘Cash is King’ is the phrase widely adopted in the Indian economy for sponsoring taxis, tips, and other relevant expenses. A significant shift has been observed in the payment system within the last 200 years. Though the usage of cash holds significance, the Indian payment sphere has adopted innovative technological change by introducing a digital payment mechanism in 2016.

The ever-evolving future trends in payment gateways shape the regulatory structure of the payment industrial setups. The constant development of the internet and technology has simplified the process of mobile payment by using different payment gateways in India.

Evolution of Payment Gateways in India

Payment gateways in India have evolved as indispensable tools for business setups to secure seamless transactions in the digital world. The emergence of payment gateways in India has offered merchants access to a variety of digital payment mechanisms, such as Visa, Apple Pay, etc.

The rising demand for online payment solutions is the major reason for the evolution of trends in payment gateway industry in India. Also, COVID-19 (Pandemic) has encouraged the growth and evolution of the online payment mechanism facilitating contactless transactions through online payment gateway services.

What are Payment Gateways?

Payment Gateway is an online payment software that acts as a middleman between a bank account and the portal where the money is expected to be transferred. The Payment Gateway License holders establish a secure payment mechanism for faster bank transaction management.

Future Market Prospects of Payment Gateways

The Indian market size of the payment gateways is expected to evolve from Rs. 1.6 billion in 2024 to Rs. 3.2 billion in 2033. The growth prospects in the evolving payment gateway industry are expected to reach a 9.7% CAGR within the next 2023-2031 period.

Benefits of Emerging Future Trends in Payment Gateways

The adoption of emerging trends in payment gateway mechanisms is necessary to enjoy the following benefits as provided below:

• To align customer values,
• Provides real-time payments;
• Secures faster transactions;
• Provides user-friendly interfaces;
• A wide range of payment systems;
• Ensures easy integration with e-commerce platforms;
• Ensures advanced security features like two-factor authentication;
• Efficiently ensures transaction processing;
• To build brand reputation, loyalty, etc.

Challenges Faced in Emerging Trends in Payment Gateways

Certain challenges are faced in the emerging trends in payment gateways that significantly lead to financial loss and mishandling of information. The following are the challenges faced by the merchants and customers making use of payment gateway mechanisms:

1. Cyber Crimes

A frequent rise in cybercrime related to online payments has been observed. Cyberattacks affect the workings of the payment gateways in India, which might lead to the concealment of skills and merchant account details.

2. Data Security

The customers’ sensitive data stored in the payment gateway system might get hacked or sold for any financial interest. This might lead to a data security breach without the customer’s consent or knowledge.

3. Loss of Time and Money

Loss of time and money is one of the major challenges faced during fixing and preventing technical failures.

4. Exposure to Technical Failures

Payment gateways might face technical errors and glitches that disrupt services for various reasons.

5. Infrastructure

The unavailability of banking, internet connectivity, and other infrastructural facilities might be one of the major challenges faced by the payment gateways in India.

Trends in Payment Gateway Industry in India

A constant transformation of the trends in payment gateway industry is observed in India. The following are some of the rising future trends in payment gateway platforms that introduced innovations and technological developments as provided below:

1. AI Payment Gateways

AI payment gateways are one of the emerging trends in the payment gateway industry. They are the result of continuous exposure to technical reforms outside the payment industry. Companies looking for efficient tools and digital platforms in India have started using AI-based technology (like voice commerce, facial recognition, etc.) to streamline the payment gateway system in India.

2. E-Commercialization

E-commercialisation is the most crucial trend in the payment system. A significant rise in the number of transactions through e-commerce payment solutions has been observed. E-commerce payment platforms are now equipped with easy-to-implement APIs, securing a hassle-free payment solution.

3. Micropayments

The emerging trends in payment gateways in India emphasize micropayments as a potential way for businesses to charge for their online content. Micropayment technology obliges users to pay transaction fees to maintain the revenue of the content.

Simply, Micropayment is an electronic payment provider that allows websites and publishers to receive small payments. Zomato, Swiggy, Fiverr, Google Ads, Upwork, etc., are some of India’s widely used micropayment providers.

4. Unified Payment Interface (UPI)

A unified Payment Interface (UPI) is one of India’s emerging payment gateway systems trends. The UPI is a new-generation payment processor that facilitates digitalization and cashless economic development through online fund transfer from one bank to another.

Simply, a UPI payment gateway secures to provide digital services and online transactions via UPI infrastructures. 

5. Buy Now, Pay Later (BNPL)

Buy Now, Pay Later (BNPL) is an emerging payment gateway that allows consumers to make purchases and pay later in instalments. BNPL facilitates more converted purchases and offers pay-over-time options to boost sales and customer loyalty.

6. Digital Wallet

For the last 15 years, the payment industry has been continuously observing digital wallet app development. The use of digital wallets ensures the free circulation of data and services through payment gateway mechanisms.

7. Internet of Things Payment (IoT)

The Internet of Things (IoT) payment ecosystem requires the most sophisticated technological developments capable of automatically communicating with the payment gateways and financial institutions when needed. This system structures the emerging trends in payment gateways.

8. White-Label Payment Gateways

One of the emerging trends in payment gateways is the customization of payment processing through white-label gateways. These gateways enable businesses to accept online payments through diverse methods, including credit cards, digital wallets, and bank transfers.

9. Biometric Payment

Biometrics integration is continuously evolving for the authentication of payment systems. Many payment gateways, including Apple Pay and Google Pay, use biometric authentication by using facial or fingerprint recognition.

10. Cryptocurrency Payments

The emergence of crypto-currency payment methods is observed after the digital shift from physical paper to digital cash. The crypto-currency interface promotes secured and fast online payments using crypto coins and tokens.

Cryptocurrency uses blockchain technology, which is expected to be a huge part of future payment systems. It records all crypto and stock-related transactions.

Conclusion

Future trends in payment gateway mechanisms discuss the holistic ecosystem of payment processing in small and medium-sized business enterprises. Continuous progress leads to the establishment of a bright payment processing mechanism. However, in accordance with the emerging payment gateway trends in India, a cashless, transparent, and well-optimized economy is created.

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