INFOKARA RESEARCH ISSN NO: 1021-9056 DIGITALISED PAYMENT THE ERA OF RISING FINTECH Ms. R.Hishitaa, I MBA, SRMIST, Vadapalani e mail id: [email protected] Dr.S.Gayathry Professor, Department of Management Studies, SRMIST, Vadapalani e mail id: [email protected] ABSTRACT For a long time, Indian citizens have remained skeptical about evolving along with the pace that technology has set.But in recent years, the country has embraced change, and it has brought so much advancement in terms of how payments are simplified. An Electronic payment protocol is a series of transactions,at the end of which a payment has been made, using a token issued by a third party.Consumers expect a safe, convenient and affordable globalised payment platform. The security features for such systems are privacy, authenticity and no repudiation. India being a developing country,encourages innovation. A factor behind the rise of digital payments is the Indian Reserve Bank’s recent policy of Demonetization.One of the fintech innovations that have completely revolutionized how payments work in India is the UPI – an instant, real-time payment system developed by the National Payments Corporation of India (NPCI).Tez, built over the UPI interface, was launched in India in September 2017. Google has rebranded its payment app Google Tez to Google Pay to tap into the growing Indian digital payment space.Google Pay has now become the king of UPI apps.The purpose of this paper is to provide a brief background about the most downloaded finance app, Google Pay andits impacton the Indian Economy. KEYWORDS-e payment, payment protocol, digital payment space Volume 8 Issue 11 2019 888 http://infokara.com/ INFOKARA RESEARCH ISSN NO: 1021-9056 DIGITALISED PAYMENT – THE ERA OF RISING FINTECH 1.1. INTRODUCTION The origin of digital payment is associated with the beginning of the internet.The history of the internet starts in 1969 with ARPANET, a military network which was intended to be communication network in the Vietnam War era. In 1989, Tim Berners-Lee presented the solution of making information easier to publish and access on the internet by using “sites” or “pages”. World Wide Web revolutionized the world at large. E-payment is a subset of e- commerce transaction to include electronic payment for buying and selling goods or services offered through the internet. Due to advancements in technology, the range of devices and processes to transact electronically continues to increase while the percentage of cash and cheques transactions continues to decrease. The “Digital India” is the Indian Government’s flagship programme with a vision to convert India into a digitally empowered country. “Faceless, Paperless, Cashless” is one of supposed function of Digital India. 1.2. EVOLUTION OF E-PAYMENTS The biggest story in India’s booming digital economy has been the rise of digital payments. As part of government reforms Prime Minister Mr. Narender Modi demonetized the high value currency of Rs. 500 and 1000 in November 2016 and also launched the “Digital India” initiative in 2015.These initiatives have provided extensive boost up to the digital payment system in the country. Government’s other initiatives like BHIM and UPI are supporting in transition and faster adoption of digital payments in the country.The period 2016-17 has been the pivotal period for payments landscape in India.The country witnessed profound changes in payments ecosystem with radical policy decisions, introduction of new age payment systems and rapid changes in user behaviour. Demonetization was introduced during this period whereby 86% of the currency notes were rendered worthless overnight. During demonetization paper money became scarce and one could witness serpentine queues in banks and ATMs to withdraw meagre currency that was available. Business and trade almost came to a standstill and the GDP growth rate decreased in spite of rapid introduction of new currency notes and use of digital forms of payment. The year preceding demonetization saw the emergence of mobile based digital wallets which witnessed rapid adoption by a large smartphone using population. Emergence of mobile based digital wallets was largely driven by new age private technology companies. Post demonetization procured drastic changes in the Indian economy in terms of payments whereby people gradually limited their use of cash and replaced it with various other new payment modes. As part of encouraging cashless transactions and transforming India into lesscash society, various modes of digital payments are available: Table 1.2.1 Various Modes of Digital Payments S.No Mode Suitability Transaction Details Cost Limit Required 1 Online/offline Set by card issuer Card Debit cards: Up to 0.75% Debit / Credit merchant sale number for transactions up to Rs Card CVV 2,000; up to 1% for Expiry date transactions above Rs 2,000. Credit cards: around 2.5% per transaction Volume 8 Issue 11 2019 889 http://infokara.com/ INFOKARA RESEARCH ISSN NO: 1021-9056 2 RTGS / NEFT High value Fixed by the Account RTGS: Up to Rs 55 per online individual and number transaction. NEFT: Up to transactions. bank Password Rs 25 per transaction Beneficiary registration IFSC code 3 IMPS - Instant Rs 2 lakh per day Account Rs 5-15, depending on Immediate transfer number transaction amount. Payment Password Service Beneficiary registration IFSC code 4 UPI Instant Rs 1 lakh VPA Less than 50 paise per transfer (virtual transaction. payment ID) of recipient, m-Pin 5 USSD - Feature 5,000 Only As levied by the telecom Unstructured phones Aadhaar operator. Supplementary without number, Service Data Internet IFSC or connectivity code allotted by banks on registration 6 E-WALLET Small-ticket Rs 20,000 per Login ID While transferring money transactions month (Rs 1 lakh from wallet to bank for KYC- account compliant wallet holders) 2.1.REVIEW OF LITERATURE An attempt has been made to review the case studies and the work of individual researchers , magazines, journals, articles relating to digital payments. Kazan, Erol. (2015).This study presents a model for studying the innovative capabilities of digital payment platforms in regards to open innovation integration and commercialization. We perceive digital platforms as layered modular IT artifacts, where platform governance and the configuration of platform layers impact the support for open innovation. The Volume 8 Issue 11 2019 890 http://infokara.com/ INFOKARA RESEARCH ISSN NO: 1021-9056 proposed model has been employed in a comparative case study between two digital payment platforms: Apple Pay and Google Wallet. The findings suggest that digital payment platforms make use of boundary resources to be highly integrative or integratable, which supports the intended conjoint commercialization efforts. Furthermore, the architectural design of digital platforms impacts the access to commercialization, resulting to an exclusion or inclusion strategy in accessing value opportunities. Our findings contribute to the open innovation and digital platform literature, by providing a deeper understanding how these digital platforms can be designed and configured to support open innovation. Omkar & Saket (2012)The advent of Near Field Communication (NFC) has given rise to several interesting applications under short-range radio technology. Perhaps the most exciting of these is card emulation. Launched in September 2011 [23], the “Google Wallet” application is one of the frontrunners of this technology. More than a year after its launch, there is clearly much interest in the commercial potential of mobile wallets by a variety of organizations in the communications and financial industries and beyond. This paper describes the working of NFC and contactless smartcards along with a brief introduction to the said mobile payment system. It also provides an evaluative study on the operation and performance of Google Wallet. A comparative study of Mobile Payment Solutions is also elucidated. Past and existing vulnerabilities of the system are discussed in detail along with noteworthy examples of infiltrations. The significant threat vectors to an NFC enabled mobile device are also examined with practical attack scenarios. Additionally, safeguards that the Wallet currently uses are evaluated. The paper is concluded by pondering on if and when such systems will become as ubiquitous as the physical wallet. 3.1.NEED FOR THE STUDY The UPI App Market Share as on July 2019 in terms of the transaction volume. Total Number of the transaction as on July 2019 was 822.30 million.As per the recent report, NPCI may set 33% limit on Market share on the total volume on UPI transaction. Fig-3.1.1 From the above figure, it is obvious that Google pay excels all the other UPI apps . Volume 8 Issue 11 2019 891 http://infokara.com/ INFOKARA RESEARCH ISSN NO: 1021-9056 4.1.OBJECTIVES OF THE STUDY To study about the various modes of digital payments method in India To decode a systematic study of Google pay To analyse how it has captured the market share in the country. 5.1. METHODOLOGY Information for the study was collected from various online sources, books and journals. 6.1.DIGITAL PAYMENT-A NEW ERA IN PAYMENT METHODOLOGY Digital Payment is an Electronic payment protocol is a series of transactions,at the end of which a payment has been made, using a token issued by a third party.Consumers expect a safe, convenient and affordable globalised payment platform. The security features for such systems are privacy, authenticity and no repudiation. India being a developing country,encourages innovation. A factor behind the rise of digital payments is the Indian Reserve Bank’s recent policy of Demonetization.One of the fintech innovations that have completely revolutionized how payments work in India is the UPI – an instant, real-time payment system developed by the National Payments Corporation of India (NPCI).Tez, built over the UPI interface, was launched in India in September 2017.