Improving digital payments for India

In India, e-Commerce works differently in various parts of the country especially in homes where payment decisions are made by only one person in the family or is someone who has the sole accessibility to make digital payments. I would like to highlight a particular problem and then suggest a solution that can be implemented by e-commerce companies or provided by digital payment solutions providers.

Scenario 1: Mom calling his son to place an order for an item she has recently added to her cart and is trying to checkout (COD is unavailable OR Prepaid has more discount)

Scenario 2: Wife asking for OTP from husband to place an order with his credit/debit card details

THE PROBLEM

The majority of the households in India, even today, have only a single person who uses internet banking, credit/debit cards, or UPI mode of payment for doing an online transaction. This results in heavy dependence by the household members to rely upon the only guy who knows or has the access to these digital payment mechanisms. In India, not everyone has access to debit or credit cards and even if they have many do not know to use them or are afraid to use them because of fraudulent transactions. So they have to rely on someone else to make payments for them.

More and more people are learning to browse and order on e-commerce apps with the ever-improving UI/UX of apps, learning through social media, and finding it easy to navigate them with vernacular options.

However, at the time of checkout, dependence on someone else makes the checkout process look tedious, and often the customers have to let go of good deals because of delay in payments. They have to mainly wait for the person to return home to place an order or ask for an OTP to complete the payment transaction in case of having card details or just add to the cart and wait for him to place the order on your behalf through the e-commerce website or app.

This breakdown during the checkout process often results in the customer never placing an order or the customer loses out on a good deal. Hence, the bounce rate from the checkout screen for such specific scenarios should be a lot higher which the e-commerce companies need to address.

Affected Users

• Parents who do not have a credit/debit card
• Spouses who use a common credit/debit card for making online purchases (This is the case with many people who want to keep a single card for payments to easily track down their monthly spending)
• People who just want to place the order on their friend’s behalf

THE SOLUTION

The above problem can be solved simply by creating a payment link for each order that gets placed. It is more of like an extension of “ Buy Now, Pay Later “ but instead of paying it yourself, the other person makes the payment on your behalf for the order you just placed. Here’s how it can work:

1. The customer (Mom) goes to the checkout page and selects the payment option say LinkPay or MiddlePay
2. As soon as the option is selected, Mom has to insert the name and mobile number of the person (her Son in this case) whom she wants to make the payment for her order
3. As soon as Mom clicks on “Place Order”, the order gets placed with an on-hold or payment due status and a payment link is sent to her son’s mobile number and email if provided
4. The order remains on hold for a few hours similar to how a ticket gets blocked for a few minutes until you make the payment. If the payment is not made, the order gets canceled automatically and the inventory kept on hold, if any, is set free in the vendor’s system
5. Now when the son gets the message and opens the link, he is able to see the cart details, the price, who has placed the order, which company is his mother purchasing from, and the hours he has to complete the payment on behalf of his mother
6. So the son can easily make the payment on his time and can also verify the purchase of the order with his mom in the time being
7. As soon as the son completes the payment, the status of the order changes to Payment Complete in the vendor system and it goes into processing

IDEA IN ACTION

Let’s see how the solution discussed above can look in reality.

Selection of payment mode and placing an order by the customer

Making of the payment by friend/relative on behalf of the customer

DEMERITS / ASSUMPTIONS

While the idea and solution may sound good enough, there are always concerns regarding its feasibility and implementation. A few of them which I would like to highlight are:

1. Possibility of phishing and scamming people
2. Loss of potential sales if items go out of stock when they are on hold (payment is pending) for a longer duration
3. Additional costs to e-commerce companies for integrating the solution in their system (It can be avoided if payment aggregators like Cashfree, Razorpay, Stripe, etc. start providing the solution)

I would love to hear some feedback. It will help me do better in the upcoming posts. Also, please feel free to comment with your views on this topic or DM me on LinkedIn

Check out valuable insights and fundamentals on Product Management on my YouTube channel — Parth Amin’s YouTube Channel