Saut Situmorang's Blog
March 29, 2017
India’s take on large scale payments innovation: ‘Leapfrogging’ to lead the pack
shelley.pursell
Wed, 03/29/2017 - 21:05
A new wave of payments innovation is taking place globally and emerging, high growth markets are the ones to watch. Encouraged by increasing customer demand, favourable regulation and unburdened by legacy infrastructure, countries in high growth markets are beginning to lead the pack when it comes to large scale payments innovation.
A great example of this leapfrogging trend can be found in India. As the country’s leading payments services provider, we are seeing first-hand that India is fast becoming a hub of payments innovation and disruption at scale.
India is home to several of the ingredients necessary to encourage new technology to flourish and old systems to make way for new. Key among these ingredients are the increasing customer demand for digital payments, a supportive regulatory environment and a highly skilled tech market.
India’s intense smartphone growth is fueling the rapid adoption of digital payments. With 220 million users, India is now the second largest smartphone market in the world. Given that India has a population of over 1.25 billon, its appetite for mobile products and services is set to continue to boom.
In more established markets, the fact that electronic payments have been a mainstay for some time is the very reason that innovation is often stifled. With legacy infrastructure and entrenched customer behavior – such as the US’ commitment to the cheque – new and innovative payment technologies don’t have an easy path to maturity.
In contrast, smartphone growth in high growth markets such as India enables businesses who are unencumbered by ageing legacy systems to more easily adopt mobile-first, digital solutions. As smartphones become ubiquitous, consumers naturally seek frictionless payments that cater to their expectations. The better the experience on offer, the quicker the uptake will be.
One of the key challenges for innovation in high growth markets is the ability to offer a wide breadth of payment options. Indeed, in high growth markets like India, alternative payments – which refer to payments made using something other than a credit card like cash, coupons, bank transfers, prepaid cards etc. – still represent as many as two-thirds of all payments. This means that although regulatory and legacy system barriers don’t exist, offering a frictionless customer experience remains operationally challenging and cost intensive.
Regulatory support
When it comes to the challenge of how to best support multiple payment types, interoperability and open platforms are critical to help break down the barriers. We’re already seeing European regulators attempting to tackle these issues with the scheduled implementation of the Payment Services Directive 2 (PSD2) in 2018. High growth markets are showing first signs that they will follow suit, looking at their local capabilities and infrastructures and how to make these more open.
Fortunately both Indian consumers and payment providers are supported in this open platform ambition by a progressive regulator that is open to adopting a legislative framework to promote innovation.
This forward-thinking attitude was evident in the RBI’s November announcement of demonetisation, which laid out the mandate for the removal of as much as 86 per cent of bank notes from the market. While the surprise element brought on personal difficulties for many citizens who rely on cash, the impact of this move also almost immediately changed the way people viewed and used digital payments platforms.
At PayU, we saw our daily transaction volume skyrocket by 80 per cent immediately after the announcement was made. It then settled to a 25 per cent increase compared with pre-demonetisation – still a significant number.
While the long-term outcome of this demonetisation is still to be seen, the bi-product is large scale payments innovation, made possible by a regulator ready to disrupt the market.
Tech workforce
India, like many high growth markets, has moved away from a commoditized, service/call centre-based tech economy to become a hub for technology development in its own right. Silicon Valley is no longer the only home for great startups and here at PayU we are working with entrepreneurs from India to Israel to bring world-leading tech to market.
Local market insight is a powerful thing. We’ve encountered startups and growth companies such as Creditas in South America and Zest Money in India that offer world class solutions to advance access to financial services in high growth markets.
India the leapfrogger
This combination of consumer appetite, supportive regulation and a thriving entrepreneur community has laid the necessary foundation for India to leapfrog over more established markets.
The conversation about high growth markets and financial services is no longer just focused on inclusion. With a strong pace of change, more and more payments companies from emerging markets are becoming the global leaders when it comes to worldwide payments innovation.
Attributed to Laurent le Moal, CEO, PayU
February 27, 2017
E-commerce Continues to Boom in Emerging Markets
shelley.pursell
Mon, 02/27/2017 - 19:10
Ecommerce continues to soar in emerging markets. Various global e-commerce studies indicate that in 2017 we can expect to see further growth in online transactions worldwide. The rise in internet access and the use of smartphones in emerging markets has been the main driver for e-commerce growth in developing markets.
A survey conducted by Credit Suisse Research Institute on the latest emerging consumer showed that the overall annual online retail sales across surveyed markets, which included China, Brazil, India, Mexico, South Africa, Russia, Saudi Arabia and Turkey – could amount to 3.5 trillion US dollars. In addition to the rapid rise in internet access, other factors propelling online retail are expanding incomes, which are resulting in a larger emerging middle class shopping online for products and services.
Emerging markets more active on mobile devices
The majority of consumers from emerging markets are predominantly making online purchases through smartphones rather than by means of the fixed-line-based internet, due to the fact that in regions which include Asia Pacific, Latin America and Africa, mobile handsets are the first-web-enabled device the majority of the populations have access to. Already fully established e-commerce markets may have much higher mobile device counts and internet access, however, consumers from emerging markets make more use of their handsets to shop compared to their wealthier counterparts.
According to the survey conducted by Credit Suisse, if internet usage across the developing countries reaches the levels found in developed countries, this could see an additional one billion internet users in the nine countries surveyed, with India and China likely to have the largest number of prospective consumers to this projection. At the time the survey was conducted, two-thirds of the internet access was through smartphones in India, and close to three-fifths in China. This indicates the importance of having a well-thought-out mobile strategy for companies planning to benefit from the ongoing e-commerce boom across emerging markets.
Current Developments
Although emerging markets still need to catch up with developed countries in their e-commerce infrastructure, they are likely to see stronger e-commerce sales growth in the future. Because of this, the global e-commerce landscape may change rapidly over the course of the next five years and beyond.
It was estimated that by 2017, the highest rates of B2C e-commerce sales would occur in Mexico, India, China and Indonesia. Ecommerce makes it possible for retailers to reach new customers that they cannot reach in traditional ways, especially in remote, rural locations. As more and more consumers gain confidence in shopping online and embrace e-commerce as a convenient way to buy products, emerging markets may ultimately outdo established markets as a result of the number of their population.
Emerging countries have potential for some of the highest growth rates in e-commerce. A good example is Indonesia, which has set itself apart as a mobile-first country. It was recorded that in 2015 more than 70% of Indonesia’s online sales were made through mobile devices.
Developing countries currently present a variety of unique opportunities in maturing to some of the biggest e-commerce segments. Their shortcomings, such as payment challenges and poor logistics infrastructure gives room for untapped potential, which if tapped into, could lead to continuous progress. An expanding middle-class, with more spending power, will likely continue to boost e-commerce markets in emerging regions.
If you are considering investing more in e-commerce retail, the emerging markets, in particular, have potential for significant growth opportunities. Or should you be planning on going global with your online store, remember that locally accessible, secure and reliable payment gateways, such as those provided by PayU, are essential when establishing your online retail store in a developing marketplace.
Sources:
April 16, 2015
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What types of integrations does PayU offer?
We offer different options for integration with our platform to fit your needs, technical capacity and budget.
Integration options available are:
Web Checkout Integration: Connect your online store with the PayU platform and when your customer clicks the button to pay, they will be directed straight to the PayU checkout website to make the payment.
Integration API: You can connect your online store to the PayU platform and the checkout process will be handled on your website. To integrate this option you must have a PayU Business account and advanced programming skills. (Currently unavailable for global merchants).
Plugins shopping carts: You can use many third party shopping carts or pre-integrated solutions to process your payments through PayU. Click here to see the plugins available.
Payment Button: A button that allows you to connect your blog or website to PayU payment gateway, without requiring additional development. This is the best solution if you only offer a few products. . .
For more information about the integration options and additional solutions that PayU offers, visit our documentation page (link: desarrolladores.payulatam.com).
How I can deactivate the Test Mode of my PayU account?
Once your account is activated, you must uncheck the ‘test mode’ option in your administrative module – then you can start receiving real transactions through your PayU account.
Enter your Admin (website link: secure.payulatam.com), click on the ‘Settings’ option, then ‘Account Settings’ tab. You will find the checkbox to clear transactions in test mode.
How I can configure my URL response page?
You can find the instructions to configure the URL of the response page on the Developers website (link: http://desarrolladores.payulatam.com/en/webcheckout-integracion/)
How do ‘Recurring and Subscription Payments’ work?
Recurring payments is a solution that we offer to businesses that have ongoing payments or subscriptions on a regular basis – daily, monthly or yearly and where the customer doesn’t need to be present to make the payment. We let you to choose the frequency of payment, include any discounts and the length of the automatic payment collection.
This solution applies for credit card payments and is ideal for subscriptions, memberships, schools, donations and more.