In the dynamic realm of digital transactions, India and the United States stand out as two distinct landscapes, each with its own set of challenges, triumphs, and innovative solutions. As someone who has witnessed the evolution of payment systems in both countries, the contrasts between my birthplace, India, and my current residence, the US, are stark yet revealing of the shared pursuit of efficiency, security, digitalization, innovation and convenience.
Cash was king in India
Growing up in India, cash was king. Whether hailing a taxi or indulging in street delicacies, or dining at a restaurant, cash was ubiquitous, rendering cards virtually irrelevant. In fact, cash accounted for 95% of all transactions in 2016, with approximately 90% of vendors lacking card readers. However, since my move to the US in 2016, I’ve observed a seismic shift towards digital payments back home.
India embarked on a digital transformation with the introduction of the Unified Payments Interface (UPI) and the bold move of banknote demonetization in 2016. With UPI, customers can now pay by scanning a QR code using a payment wallet, while merchants can accept payments in real-time without the need for extensive payment infrastructure or interchange fees, simplifying the overall process. This has contributed to UPI’s widespread adoption, with a staggering 83 billion transactions recorded last year. From street vendors to shopping malls, the UPI real-time payment initiative has democratized financial transactions, permeating every corner of society and largely reshaping India’s payment ecosystem since its launch.
Furthermore, India’s vision extends beyond its borders, with initiatives underway to facilitate cross-border real-time money transfers through UPI. Collaborations with countries like Sri Lanka, Mauritius, France, Singapore, Nepal and the UAE highlight India’s ambition to foster global interoperability, allowing travelers to utilize UPI for purchases abroad. It is a personal delight to have the option to pay for the ticket to the Eiffel Tower using UPI, and I’m sure to try it when I visit.
Cards are king in the US
In contrast to India’s cash-dominated landscape, debit and credit cards were widely accepted in the United States when I moved in 2016, gradually replacing cash as the preferred mode of transaction. Apple Pay, now accepted at 85% of retailers, along with other digital wallet options such as PayPal and Venmo, offered users convenient alternatives to traditional payment methods.
In 2017, Zelle’s launch marked a milestone in peer-to-peer payments, alongside The Clearing House’s introduction of the Real-Time Payments (RTP) network, offering instant payment options. The subsequent integration of Zelle with RTP in 2021 further enhanced the ecosystem, enabling instant clearing and settlement over the RTP network. Adding another dimension to the US payment infrastructure, FedNow was introduced last year, promising to complement existing systems and expand the horizons of real-time payments. While both FedNow and TCH’s RTP represent incremental improvements to the US payment infrastructure, their coexistence and interoperability remain to be seen. In a nation where competitiveness fosters innovation and offers consumers and organizations choices, the synergy between these services will likely shape the way we transact in future.
Charting the course: Embracing opportunities, mitigating risks
With the rapid evolution of payment systems, we are witnessing a simultaneous rise in fraud patterns and cases, driven by advancements in AI and processing power. Fraudsters are leveraging advanced technologies to exploit vulnerabilities in emerging payment systems, highlighting the critical need for resilience and security. Digital identity initiatives like Aadhaar in India and mobile driver’s licenses (mDLs) in the US offer promising avenues to address some of the existing flaws in the system and mitigate risks. At Consult Hyperion, we recognize the importance of these initiatives and stand ready to assist in their implementation and enhancement.
In the journey towards a cashless and digital future, collaboration, competitiveness, and innovation are serving as guiding beacons. By leveraging the synergies between different ecosystems and understanding the nuances of each, India and the US are paving the way towards financial inclusivity and empowerment on a global scale. It is not about a one-size-fits-all solution; instead, we must craft tailored solutions that meet the diverse needs of each nation and its citizens. Through Consult Hyperion’s expertise, you can navigate these complexities and build payment systems that are resilient, secure, and user-centric, ensuring a secure transition towards a digitally empowered future.
