The news has been seasoned with articles over the last two years analyzing the pros and cons of demonetization. And there are sufficient and justifiable claims for both sides. With the recent news from Mastercard, however, the favor seems to fall on the pro side of fence – at least for the growth of electronic payments – with payment facilitators playing a major role.
India’s well-established RBL Bank, in partnership with Mastercard, recently announced the addition of more than 500,000 merchant acceptance or POS locations since demonetization in November of 2016 – this being the fastest by any bank during this timeframe, according to the press release.
And what enabled such dramatic growth numbers? RBL Bank signed several strategic partnerships with payment facilitators that allowed the bank to expand into tier two and three cities and rapidly grow its digital footprint, in addition to establishing a presence in new market sectors such as education and healthcare, according to the same release.
But this, of course, is only one vantage point. MoneyControl reports that while digital payments are in fact on the rise, cash still dominates in India’s ecosystem. What could be the reason? The same source asserts that “while Internet connectivity and data cost are no longer issues, trust in electronic systems and lack of accountability in digital systems is often cited as a hindrance to mass use.”
So how to ensure the digital payments momentum continues to rise? Mastercard seems to be doing its part by creating Acceptance Forums in Bangalore and Mumbai and even a Payment Facilitator Accelerator Consulting program that will provide guidance for growth through partnerships and necessary risk-management education.
“Mastercard has been working towards accelerating awareness and acceptance for digital payments in India, especially in tier 2 and 3 markets,” said Mastercard’s Senior VP of Market Development Southeast Asia Rajeev Kumar. “A robust digital payment ecosystem is key to achieve this. Mastercard’s partnership with RBL Bank is an important step in this journey, as it unleashes several avenues for growth of digital payments across India. With partnerships like these, Mastercard is certain that India will be the largest digital payments acceptance market by 2020.”