Recently, the Reserve Bank of India (RBI) stated that it is in discussions with the government to reduce cash usage in the system and effect a transition towards a cashless economy. Clubbed with the Digital India initiative of the Government of India that aims at delivering government services to citizens electronically, one hopes that more and more people are weaned away from cash transactions towards e-payments.
However, tangible steps need to be taken to reduce the cash dependency of the Indian populace. If trends observed in emerging economies are any indicator, a very effective way of getting over the crush on cash is to increase the availability of e-payment platforms, particularly virtual POS systems, which will have multiple benefits encompassing the entire economic spectrum. Consumers, merchants (particularly small and curb-side kiosks), small and medium enterprises (SMEs), large corporations as well as the government – all institutions stand to gain.
Benefits of virtual POS systems – It’s a win-win situation
Virtual POS solutions offer an incredibly simple way to convert a smartphone (or any other Internet-connected device) into a POS terminal. Transforming a Net-connected device into a payment-processing tool enables speedier and more reliable transactions, as also cost-saving and better return on investment (RoI).
Here’s a broad-based look at some of the benefits that can accrue with the widespread adoption of virtual POS devices:
Sales boost for merchants: A virtual POS platforms can help businesses boost sales by eliminating the dependence on check-out counters, queues and geographical location as it enables them to accept e-payments online securely and efficiently. It suits businesses of all sizes, particularly small businesses, as it provides a fully equipped virtual terminal with the value-add features every merchant needs. A virtual POS product converts the smartphones of merchants into e-payment-collecting devices, without them having to invest in any additional infrastructure, including a POS machine. This kind of a payment platform can, thus, become a ‘Super Wallet’, spurring the activation of debit, credit and prepaid cards.
Another advantage of a virtual POS system is that it enables multiple users to have access at the same time and allows remote login for management. Besides, it enables merchants to generate receipts, issue refunds to a customer’s credit card, capture previously authorized transactions, store credit card or debit card payment information in a customer’s wallet for future billing, and confirm transaction status.
Merchants, particularly SMEs, benefit greatly as there is less cash and cheque handling in the system. Virtual POS systems provide them with a low-cost solution for collecting payments that make credit/debit card acceptance feasible where previously it was not. At the same time, this kind of a payment platform provides opportunities to larger retailers to create efficiencies and enhance the in-store shopping experience of consumers. A whole host of problems, burdens and risks associated with cash simply disappear, to be replaced by a convenient, secure e-payment method.
Security and flexibility for consumers: A virtual POS system encourages consumers to opt for electronic payments more often, thus weaning them away from cash. It also frees them from geographical constraints while making purchases, opening up an entire world of shopping, where transactions can be made at the click of a key, and yet, payment can be made conveniently and securely after the delivery has been made. It has been observed that Indians are more comfortable with the Cash-on-Delivery payment mode. With a virtual POS device, they can easily e-pay, without having to use cash. Moreover, consumers no longer need to go through the hassle of creating a separate pre-paid wallet and load cash each time.
A virtual POS device, thus, fits varied needs, more so in a growing economy. Next generation mobile-first virtual payment platforms provides small and medium-sized merchants an opportunity to access low-cost payment solutions that were previously unavailable to them. It can store all payment details securely and can be used by invoking second-factor authentication. It also converts regular text messages and email reminders into actionable payment links, allowing merchants to e-collect from consumers.
Overall, the future of making and collecting payments lies in virtual POS platforms. According to Ken Research, the Indian payments market is expected to touch Rs 8,172 billion by 2019. Understandably, the market is highly competitive, with a number of payment solutions floating around. The differentiators, in the long run, are going to be user experience and security.