User experience, local innovation key to winning payments market: VCCircle Summit
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Superior user experience, local innovations and a large customer base will go a long way in winning the payments market in India, said panellists at the seventh edition of VCCircle Payments Summit 2018 held on Wednesday in Mumbai.

The event, themed around “The Future of Payments is Here”, opened to a packed audience which included top executives from leading payments service providers, banks, and private equity and venture capital firms.

Manas Nath, country sales manager of nonstop enterprise division at Hewlett Packard Enterprises, kicked off the event with a keynote address on how payments technology had become a 'must have' for financial services firms.

The first panel, moderated by VCCircle editor-in-chief Archna Shukla, included Sandeep Murthy, partner at venture capital firm Lightbox; Bhaktha Keshavachar, co-founder and CTO of Ezetap Mobile Solutions; Narayanan SP, CEO of NSDL Payments Bank; and Vishwas Patel, CEO of payment gateway solution firm CCAvenue. The discussion focused on ‘Who would win the Indian market -- local or global payments players?’

Traditional companies enjoy the advantage of a pre-existing large customer base even as challengers disrupt the market with innovative products, the panel said. Global players in communications and e-commerce seem to be making a lateral shift into payments and are bringing in a superior user experience; however, it is unlikely that one player will corner the entire payments market, panellists agreed.

India is still a debit-focused market, unlike the West, where spending on credit is the norm, panellists said. The debit side of banking, which includes bank accounts and cash payments, is ripe for innovation, Patel said.

Local players can do something new and then scale it up fast, especially as the market is spilling into Tier-II and Tier-III cities – for they have the advantage of knowing the market, Keshavachar said. He cited the example of Cash on Delivery (COD) payment option, which is not available elsewhere in the world.

“We will provide services that are sustainable, specific to certain segments, and cater to solving certain pain points, which will be the primary differentiator for local players,” said Narayanan SP.

“Local and global players will co-exist; one person cannot take over the entire chunk of business. But in select segments, where there is peer-to-peer interface, the user experience is likely to drive the market,” Narayanan said.

Global financial services companies may enjoy an advantage in providing an improved user experience while local players may have an edge in solving critical pain points, some panellists said.

However, this may not always be the case. Murthy said global players will come and quickly understand the local market, as in the case of the e-commerce industry. “Global players are no longer coming in with the mindset that what worked elsewhere will also work here,” Murthy said.

Therefore, companies have a short “window of time”, he said.

"Do you understand something unique about the customer? Do you understand something unique about his/her experience? And do you have an approach that will be difficult for someone else to replicate? And during that short period, can you scale up your brand and trust with the customer?” Murthy said. If not, then someone with massive scale (pre-existing customer base) or massive capital will come in, Murthy said.

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