After the government’s demonetisation move in November 2016, there has been a key beneficiary in the thrust towards cashless transactions. Digital payments became a preferred mode of money transactions across the country. The convenience of using digital payment options has enticed more and more consumers across age groups. However, there are some privacy concerns and threats of frauds while using this digital payment options.
Four experts from different areas of expertise give their take on whether the thrust on digital transactions post demonetisation helped consumers.
Digital payments growth brings in its wake privacy and fraud concerns
Venkat Krishnapur, Vice President of Engineering and Managing Director, McAfee India
Demonetisation paved the way for increased adoption and inclusivity of digital payment solutions. The proliferation of these platforms have been evident, with the Unified Payments Interface (UPI) transactions crossing the one billion milestone in October 2019. This has benefitted the average consumer, but privacy concerns have caught up as well. Payment fraud, identity theft and data privacy concerns have become hurdles to the ubiquitous usage of these services.
Encouraged by the Indian government, digital payment systems continue to grow rapidly. However, they must be redesigned to protect privacy, customer data while complying with end-to-end encryption and standard protocols. Without a strong data privacy and security architecture in place, these entities will continue to remain, bordering on the exploitative.
Benefits far outweigh potential negatives
Srikanth Meenakshi, Co-founder, PrimeInvestor.in
The benefits of adapting to digital payments far outweigh potential negatives for the simple reason that these risks are temporary and manageable, but the benefits are permanent. Transferring money at a moment’s notice to a relative in a far-flung area, or in real-time at a Point-of-Sale (POS) – these are game-changing positives that have held up the Indian financial services industry as a leader internationally. The potential for fraud will reduce with increasing customer awareness, and privacy concerns will be addressed by the market with vigilant feedback from customers. But, people will be loath to giving up the conveniences they are getting with digitisation.
Cash remains the king
Anush Raghavan, Vice President – Cash Management, CMS Info Systems Ltd
In a massive country such as ours, while digital payments make rapid strides, cash continues to be a preferred mode of payment. As 95 per cent of Indian retail expenditure is offline and unorganised, most people generally deal in cash payments and that’s where the opportunity to create a robust infrastructure to move the needle lies.
Having said that, any mode of payments – cash or electronic – must ensure safety for consumers to move and manage their funds. A robust regulatory framework and strong security guidelines to protect customers and mitigate risk at every step is extremely vital for the success of any transaction platform.
Expenditure can be made controlled systematically
Lovaii Navlakhi, Managing Director and CEO, International Money Matters
The move to digital payments post demonetisation could have increased spending; it has also increased the convenience. Moreover, you can analyse spending patterns and control expenditure by limiting the size of your wallet; you could also use different wallets for different purposes, much like distinct bank accounts for investments and salaries.
Privacy has been and is a separate issue -- the more the intermediaries and interaction points that I as an individual am exposed to, the greater precautions I need to take to avoid being “hacked” into. I could scream that the “authorities” must protect me – and they will in future – but we are clearly aware that innovation always precedes regulation.