Data security priority as BNPL, unified platforms enable payments

Anjali is a young professional who buys everything from meat to digital accessories online. With her must-have list, she keeps checking out e-commerce portals every month, loading the carts with products. Once done, she prefers a quick payment gateway at a single click and checks out. If for some reason the check-out time drags, she does not think twice before deserting the cart.

Such ease and convenience are at the heart of digital shopping today. Especially, payment and checkout processes need to be seamless, secure, and efficient for today’s consumers. But 95% of portal visitors do not buy. This volatility affects business owners, specifically medium-sized enterprises as they struggle to attract new customers and retain old ones to attain profitability and growth. The situation could not be mitigated even after hyper-personalisation efforts taken by e-commerce portals to drive sales.

With a view to offer a seamless blend of payments and shopping, Flipkart, one of the largest B2C homegrown marketplaces in the country with a 500 mn+ customer base has unified its payments framework, under ‘Flipkart Pay,’ which includes the use of Flipkart Axis Bank co-branded credit card, to Pay Later, Personal Loans, insurance, and gift card offerings. "Whether consumers are paying for a chai, an auto ride, or other offline purchases, each time a customer scans a QR code to pay, they engage with our app, and these interactions often lead to increased browsing and discoverability of our e-commerce offerings," says Gaurav Arora, Vice President, Payments and SuperCoins, a reward ecosystem at Flipkart.  

Of all the payment gateways, the Unified Payment Interface (UPI), since its introduction in 2016 has gained great mileage and adoption. But the rate of growth of e-commerce in India is expected to touch $163 billion in 2026, and with platforms that process and deliver so many orders per minute, the existing infrastructure of UPI, especially the frequent transaction failures and downtimes will not be able to support such whopping traffic and sales volume. Smarter systems and scale-ups are the need of the hour to address this growth surge.

Purchase is always a pressure, finds Accenture’s Consumer Research 2024. In fact, in the last months of 2023, 74% of consumers walked away from purchases. According to Dynamic Yield, which collates and publishes e-commerce insights through statistical data, in the Asia Pacific region, the cart abandonment rate stands at a high of 80%, against a global average of 71.68%. It is because consumers felt overwhelmed with the choices. Choosing small items like moisturiser can be as challenging as selecting big-ticket items like a washing machine, the research validates the finding thus.

To bring down abandonment rates and facilitate visitor-to-buyer conversion, Buy Now Pay Later (BNPL) widgets that are user-friendly with easy EMI options and offers come to the merchants’ rescue. Reward systems that help customers earn while they shop, platform UPI services and expanded recharges and bill payments categories further simplify accessibility to digital payments and broaden accessibility for e-commerce.

Yet, for all we know, online payments are never disruption-free. 56% of organisations that accept payments say their customers have frequently experienced at least one of their transactions being declined, says Chandramouliswaran V, Vice President of Data & India Site Leader, PayPal.

"Many of the abandoned carts result from payment failures, which can stem from various factors including declines due to unsupported payment methods or even human errors, such as entering incorrect payment information. Authorisation rates indicate the percentage of transactions and payments that are successfully approved and can significantly impact the revenue. A higher authorisation rate indicates a greater number of approved transactions, while a low authorisation rate will include lesser ones.”

Moreover, payment gateway providers diversify to provide from online to offline digital payments to QR codes. Hence in a dynamic landscape, product leadership and feasibility drive customer choices.

Lakshmi Natarajan, global technology executive, certified independent director, founder, and owner of Jyothirmai Exim shares that her choice is based on “Familiarity, seamless usage and availability of services.”

Further, to boost performance, e-commerce portals unleash AI/ML to put together strong APIs for refunds, exchanges and settlements. Customer data that is collected in the process is protected through the use of encryptions, tokenisation and multi-factor authentication.    

Multiple security audits come to the fintechs’ aid to stay proactive and prepared for frauds and breaches, points out Chandramouliswaran. "We believe in responsible AI Innovation and follow a ‘design by privacy’ approach. PayPal's ‘Passkeys’ feature, introduced in 2022, replacing passwords with cryptographic key pairs to offer customers a simple and phishing-resistant and secure way to log in to PayPal is a first of its kind."

“With transaction volumes in India’s digital payments landscape set to rise from 159 billion in FY 2023-24 to 481 billion by FY 2028-29, as a tech-focussed organisation, digital payments enable us to drive deeper customer engagements and also positively influence digital habits,” Arora weighs in.  

Still, for wider recognition and adoption, says Lakshmi, “Fraud awareness should be improved in India. Cyber-security, explained in simple terms will be helpful. Skilling and training support agencies should pitch in to help RBI in this task,” adds Lakshmi on a futuristic note.