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Cashless Think Tank #9Murali Balaraman: “Worldwide Cashless Payment Interoperability is a Key Challenge”

By Wirecard Editorial Team

The future is cashless – this is what our Wirecard experts regularly report on this blog. But as we also find other perspectives exciting, we have asked various experts with different backgrounds for their insights, experiences and opinions about cashless as part of our "Cashless Think Tank" interview series (click here to read all parts published so far).

Today we continue with Murali Balaraman who is an Indian business leader with more than 24 years of banking and financial services experience. He has worked with Ernst & Young, IBM, Polaris Software, HDFC Bank and Citibank, amongst others.

Murali Balamaran, Indian business leader and payment expert

Murali Balaraman, Indian business leader and payment expert

Murali, from your perspective, what are the most important advantages of cashless payment?

Managing cash is a hassle – you have to count, verify, secure, transport, store, protect and insure, which adds to business costs. There is also a significant cost to the economy to print money and keep it in circulation. Add the risk of theft or fraud and theft, or loss of tax from black money, and you realize there is much to lose. ATM’s are a cost centre to banks.

Cashless needs initial infrastructure and educating people. It can make payments faster, more secure, and convenient. To ensure everybody benefits, poor people with no access to banking and elderly people who face challenges to adopting a new way, need to be taken along. Smartphones have become ubiquitous in India, and most apps are free. They provide an excellent method of making cashless payments.

What are the most important factors that are helping cashless to become more prevalent in India?

A major factor is that more and more governments are strongly promoting cashless payment by creating the necessary technological and a legal framework with incentives. The Indian Government is committed to Cashless and Digital. They have created Immediate Payment Services (IMPS) for instant real time payments. The Universal Payment Interface (UPI) extends that to the mobile phone without providing your bank or card details.

India has extended cashless payments using Aadhaar, India’s Social Security Number. Bharat Interface for Pay (BHIM) and Aadhaar enabled payment system (AePS) have enabled app-based payments. Using these technologies and wallets, small amounts can be paid at corner shops, but also your electricity bill can be paid through just one click. This saves a lot of time and effort and is also very helpful for financial inclusion.

"What we need fundamentally is a universal cost-effective standard like QR codes that can be accepted by all countries as a payment method" - Indian payment expert @muralibalaraman #gocashless #CashlessThinkTank #WirecardBlog

Smart solutions are also very important. For example, the Indian company PayTM uses QR codes to allow quick and digital payment for really small shops like coconut vendors or taxis and also for peer-to-peer payments. This is much simpler than NFC, Wi-Fi or Bluetooth for payments. All you need is a mobile phone camera to trigger.

How do you think cashless payments will be made in 2030?

What we see today is incremental innovation, so all our answers will be in that direction. I believe we will see some major disruptions in the payments landscape globally. Today, interoperability is one of the key challenges. You can’t use any of these technologies when you travel abroad for example. It took us many years to build EMV as a de facto standard. We have seen disruptions in the past like the iPad and the Apple Watch, so wearables are becoming an area for payment experiments. With technologies like smart spectacles, foldable screens in hardware or QR codes, facial recognition and finger prints in biometrics, options are expanding. Who knows what will be still popular by then.

The much-quoted Uber experience or Amazon Go are of course trend-setting and exciting examples for tomorrow’s payments. However, what we need fundamentally is a universal cost-effective standard like QR codes that can be accepted by all countries as a payment method. Who knows, maybe voice recognition will replace all physical necessities to verify payments securely.

We will see which of the many innovative technologies mature and become established. In any case, the payment industry remains very exciting!

That's right - and many thanks for the interview!

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