The mass adoption of ecommerce and boom in online shopping have been the single biggest push for digital payments during the Covid-19 pandemic, panellists at an ET webinar said, as restrictions on physical businesses forced Indian consumers to redefine their spending behaviour.

“I cannot pass this point without highlighting the boom in e-commerce,” said Praveena Rai, COO of digital payments railroad NPCI, at The Economic Times-Back to Business Dialogues – The future of digital banking and payments in a post-pandemic world.

“The growth is far more prominent on ecommerce during Unlock than before pre-pandemic and during the first phase of lockdown. Here, the opportunity is in conversion of Cash on Delivery (COD) to Digital on Delivery. COD was an animal we were trying to tame, and it seems that its day has finally come,” Rai said.

Industry executives said they saw this as a huge opportunity due to the unprecedented surge in first-time users and merchants adopting digital modes. Most retail payment channels, including the Unified Payments Interface, clocked record volumes in July and August.

This sort of consumer behaviour would become irreversible, the executives said, adding that it was integral to ensure that consumers were protected, more than ever.

“It is often not highlighted as it’s not as fashionable as some of the other points. It’s on the notion of how cyber security, data privacy and online fraud risks are perceived,” said TR Ramachandran, group country head, India and South Asia, Visa Inc.

“We have to be responsible about this. It’s a very lethal combination for fraudsters to insert themselves from a phishing and vishing attack perspective,” he added.

The Economic Times’ Back to Business panel is part of back-to-back webinars featuring industry leaders deliberating on economic recovery in a post-pandemic world. The panel was moderated by Mihir Gandhi, partner and leader, payments transformation at PwC, with participation from NPCI’s Rai, Visa’s Ramachandran, PhonePe cofounder & CEO Sameer Nigam and SBI’s deputy managing director (strategy) and chief digital officer, SBI, Ravindra Pandey.

The panellists held detailed discussions on four broad themes, including the future of transit payments and regulatory impetus by the central bank to fast-track digital payments.

“RBI wants offline payments for tier 10 and beyond villages. For bankers, the challenge is how to ring-fence fraud and risk management systems,” said Pandey. “There has to be quid pro quo between risk and business. The regulator must provide some margin to manage risks.”

The industry leaders also provided insights on what was needed to bring the next billion transactions onto digital channels and identified transit as a segment that provides massive cash-displacement opportunity.

“When the market recovers, it would be amazing if we could figure a way to do queue busting. When I was younger, I remember the queues to get a ticket or monthly pass on the Mumbai Western Line,” said Nigam of PhonePe.

Nigam was also vocal on the implications of the upcoming new umbrella entities (NUEs) envisaged by the Reserve Bank of India.

“I don’t know if we need our own NUE. We have to solve for fraud and we need to open up the market…More NUEs may fragment the ecosystem at the network level. There is a lack of clarity on what it solves,” he said.