Visa, a global leader in digital payments, is positioning its  Contactless payments offering as a convenient and simple solution for the “Aam Admi” (common man)also and not just for the affluent consumers, who are leading its adoption in India, Ramakrishnan Gopalan, Vice President, Head of Products and Solutions, for India and South Asia has said.

“This (contactless payments) is not something that works only for the affluent customer. In my view, contactless is for Aam Aadmi in India where every customer in every possible pyramid in Indian social ecosystem can benefit”, Gopalan told BusinessLine. 

He was discussing the findings of a whitepaper, ‘India taps into a Contactless Future’, released by Visa in partnership with payments processor Worldline India.

“I do believe every customer in India across social hierarchy would like to avail the benefit of this. Initial adoption could come from affluent segments in India, but we are very clear that growth is going to come when there is mass adoption”, Gopalan said.

The white-paper revealed that Contactless payments in India — which started in May 2015–saw a 6x growth in last three years. The contribution of contactless payments to total face-to-face (F2F) transactions grew by more than 6x - from <2.5 per cent in December 2018 to 16 per cent in December 2021. 

Contactless payments are cashless transactions that do not require cards to be swiped or dipped at Point-of-Sale (POS) terminals.  It is a new technology that allows a customer to simply tap a card to pay. The EMV chip card adoption has been pivotal for the growth of contactless payments in India in recent years.

The white-paper showed that the ‘affluent’ segment has been the most enthusiastic adopter of contactless payments, followed by the mass affluent segment. For mass affluent customers, contactless has become a preferred mode of payment especially for daily essentials such as food and grocery, fuel, and drug-stores and pharmacies. 

There is a higher adoption rate for contactless and card-on-delivery options among affluent cardholders with digital-focused personas, such as ecommerce and electronic shoppers, luxury travellers and avid wallet users, for whom convenience and time are important, the Whitepaper revealed. 

The whitepaper highlighted that the highest adoption of contactless payments was observed in sectors like Quick Service Restaurants, pharmacies, food, grocery, which accelerated with the impact of the pandemic.

Banks, Fintech partners

Gopalan said that Visa is working closely with banking and Fintech partners to issue more and more contactless cards.

”Couple of years back that number was low. I The percentage of the card enabled for contactless was 30 per cent. Now this number is 90 per cent. Through continuous engagement with industry players Visa has been able to demonstrate the value of contactless to our banking and Fintech partners”, he said.

Gopalan said that the key drivers of contactless growth – availability, convenience, utility, and security – will continue to aid adoption at scale as contactless cards become ubiquitous. “We are confident that it is a sustainable payment solution for seamless face-to-face transactions and will help greatly in reaching the goal of a less-cash society”, he added.

According to Worldline India, while 25 per cent of all transactions at supermarkets were contactless in January 2020, these transactions rose to 31 per cent by January 2022

The user footprint across India also stepped up with metro cities leading the way.  In 2020 and 2021, Delhi NCR, Karnataka, Gujarat, and Telangana had the highest proportion of contactless transactions and penetration, across both debit and credit cards.

The white-paper highlighted that fintech expansion will drive contactless inclusion beyond metro borders: Also low- ticket contactless payments will fuel non metro acceptance, it added.

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