Let’s face it – from the start of 2020, till today, there have been unprecedented surges and changes globally and we have witnessed a massive shift towards online shopping because the pandemic impacted the world in ways we could not have imagined.
Lockdowns, business closures, self-imposed isolations and quarantines saw people resort to online shopping because it was one of the only ways for sustenance, provision and protection. There really was no other option other than online shopping that meant survival.
Here are some interesting statistics that explain the shift to online shopping in the past 18 months:
- 59% of people shopped online during the pandemic because they did not want to interact with others and maintain the social distancing norm.
- 50% of people shopped online because many non-essential businesses were closed.
- 30% of people felt that it was more viable to shop online as they could buy more products at one go in one store.
- 26% of people shopped online because they were under quarantine or self-imposed isolation.
- 14% of people shopped online because the items they wanted were available only in e-commerce stores.1
The bottom line of these statistics is that online shopping is a shift that is here to stay and is likely to be irreversible.
Over the past 18 months of the pandemic, as businesses changed, so did consumer behavior2. The past few months saw more and more consumers being open to adopting digital payments as it gave them the convenience to buy all that they needed with minimal interaction. It is only a matter of time before online shopping using digital payment methods becomes a new normal because safety takes precedence over anything else. This is another reason that websites selling online understand the importance of safe payment gateways.
Online shopping during the lockdown
Lockdowns, over the past year and a half, have seen a surge in higher in-home consumption. With people resorting to online buying, it becomes necessary to offer a seamless shopping experience from start to finish to translate them into happy and repeated customers. Not just a good payment experience, but a secure and safe online payment experience should also be offered by the seller to provide an extra layer of security to consumers.
Online shopping is becoming a thing of convenience for many. Especially for those who don’t have the time to step out of their home, but want to have everything delivered.
The emergence of hyperlocal partners invaded every alley in the city and ensured timely deliveries of almost everything; from books to food and more. They garnered more popularity during the pandemic because of their easy availability. There is almost everything that gets delivered today, from fresh fruits and flowers to prescribed medicines and more.
Most of the ecommerce platforms offer a variety of payment options like COD (Cash on Delivery) or online payments using UPI or debit and credit cards. With most people resorting to online shopping, it becomes important for the merchant to provide a secure payment gateway that gives assurance to the buyer. Let’s look at some aspects of why it is important to have a safe payment gateway.
Importance of safe payment gateways for online transactions
A payment gateway helps to enhance the overall performance of your business. It is the one-stop-shop where payments are made in return for goods and services that are purchased. The importance of safe payment gateways can be judged from the benefits:
Did you know that close to 40% of consumers can cancel their purchase if the payment method is tedious or involves too many steps? An easy checkout always offers a seamless experience to a customer. A start-to-end experience that makes online shopping as easy as possible.
In continuation with the first point, close to 40% of consumers are likely to indulge in an impulse purchase if the payment process is easy and integrates with the shopping cart.
Other aspects that consumers consider in a payment gateway are prevention of fraud management, an option of recurring billing and multiple payment options.
Payment gateways on websites provide secure transactions by complying with security standards like PCI DSS, etc.
Apart from the points listed above, it is critical to pay attention to the importance of safe payment gateways for online transactions when consumers shop online.
What are some of the factors to consider when doing this?
While digital payments are meant to be convenient, they also need to work for consumer interest; which broadly translates to convenience and security. When convenience causes restrictions, it can hamper the growth of the economy as it means lesser consumption and buying.
Stakeholders or consumers should be able to make informed decisions when it comes to making a purchase; and this process should be easy, not cumbersome. The end motive is to not drive out consumers from the digital space, but for consumers to contribute to the economy.
With customers being informed 24 hours in advance the chances of fraudulent auto-debits are reduced considerably. It allows customers to know what the amount was getting debited for.
It is no longer about adding the card details and continuing with transactions – a certain limit of transactions still needs approval by adding the CVV/expiry date or an OTP. The goal of digital transactions should be – straight, secure, simple, fast, and the regulation should ensure this.
With these security measures in place, safe payments for online shopping, transactions and e-commerce websites can be ensured. With secure payments, a consumer feels a sense of safety that enables them to buy online.
In order to make these transactions more secure, the Reserve Bank of India (RBI) came out with certain regulations to help a shopper secure online payment.
What are the RBI regulations all about?
While all the above-mentioned factors provide security, in the second half of 2021, Reserve Bank of India set up a rule that on October 1st, 2021, all previously set auto-debits would cease to exist in an attempt to control fraud and phishing. With this mandate in place, all linked auto-debits ceased to work, until the user re-registered themselves and every transaction needed to be authenticated by a pin or a CVV along with a 24-hour notification to ensure there was no scope for malpractice. The advanced notification for executing recurring payments authorized by customers was to seek approval to carry out any transaction – an extra layer of security to ensure the safety of all transactions.
Even though these rules ensured safety, for many these payment processes could come across as less convenient. Especially for those who want to shop at the go or for senior citizens or just you and me, adding the card details for every single transaction can be cumbersome.
While the main focus of the regulation by RBI was security, it is important to note that most e-commerce platforms already adhere to PCI DSS standards. According to these standards, this data storage and access by third parties can be protected under Indian Laws rather than imposing a hard stop restriction on websites.
Adding authentication layers at every single stage for consumers (reauthorization or reauthentication) is likely to mar the shopping experience for them. It can, in the worst-case scenario, drive them away from the digital ecosystem, which runs contrary to India’s Digital India goals.
While there is a greater good in regulations that allow the consumer to control the payments, it is also important to ensure that these regulations are consumer-friendly. At the end of the day, the importance of safe payment gateways for shopping needs to be aligned with the purpose of providing a seamless experience to the consumer.