There is a reason why typewriters and mimeograph machines are no longer a part of the contemporary corporate setting; it is called technological advancement. Every new phase heralds the entry of newer developments which support, augment and eventually supplant the previously established model. Nowhere else is this shift better exemplified than in the Indian payments industry; 2015 witnessed digital payments channels outgrow paper-based transactions in India for the very first time. With the ongoing digital revolution expected to empower 702 million Indian consumers with smartphones by 2020, the balance is predicted to irrevocably tip in the favour of digital payments in the near future.
But why are digital payments tools such as e-vouchers and wallets gaining traction over the traditional currency that has been in vogue for so long? Below mentioned are five benefits that underline why digitisation of payments and vouchers is rapidly becoming an urgent need in today’s technology-powered world:
The convenience that digital payments bring in has been one of the most prominent reasons for their widespread usage today. Not only are electronic payments more eco-friendly, but have also replaced the hassle of carrying and managing paper cash and vouchers with easy interface and seamless transactions. Companies that have digitised their corporate expense management enable their HRs to distribute vouchers to their employees through click-based processes. This introduces greater efficiency for the organisation through a minimisation of expenses related to printing, inventory management and logistics, whilst also drastically cutting down on the time taken to complete the distribution.
Such convenience is particular helpful in case of managing corporate disbursements to business functions such as sales, which often incur frequent expenses on account of their professional responsibilities. Digital vouchers and e-wallets are also 100% compliant with RBI and tax norms. As such, corporate remittances made through digital vouchers do not contribute to an employee’s taxable income, leading to greater value addition and more savings for the employee. Organisations too can gain tax exemptions by showing digital reimbursements against their expenses. Moreover, with their smartphones becoming the repository of their digital currency, employees no longer have to remember carrying bulky booklets in their pockets or count coupons/cash while making payments.
Greater visibility and control over payments
Tracking paper-based expenses can often be a big concern – for both individuals and business organisations – and often leads to discrepancies in expense management. Digital wallets cut through the hassle of dealing with multiple service providers by providing a single dashboard for every user transaction. This grants users greater visibility about their day-to-day transactions and allows them to keep a tab on their monthly expenses.
The growing dependence on digitisation also means that the organisation issuing digital vouchers have the flexibility of ‘locking’ them for specific use-cases. Loosely translated, this means that a voucher issued as a fuel expense cannot be redeemed at a restaurant to pay for meals or vice versa. This grants organisations greater control over their corporate disbursement process and leads to an efficient expense management practice.
Physical wallets that get lost or stolen are almost impossible to recover, as is any cash or vouchers that one is carrying within. There is also a very tangible risk of critical financial instruments such as credit or debit cards falling into the wrong hands and being misused by unauthorised individuals.
Most digital wallets and voucher programmes do away with such security loopholes through PCI-DSS compliant frameworks and password-protected services. Other security features, such as a two-factor authentication protocol, are also included to make the digital medium of transaction much safer for the end-user; since the OTP is generated within one’s phone, it becomes highly unlikely that an unauthorised party can make transactions through the wallets. Furthermore, users can easily block their wallets and change their account login credentials in case they lose their smartphones, allowing for secure usage without a breakage in the payments experience.
Some wallet players are also offering a prepaid digital/physical card to their users in order to heighten the security and convenience of digital transactions. Having these cards linked to their wallets allows users to make payments without exposing their confidential bank account-related information. Digital wallets also require login PIN/passwords to view sensitive financial information, further underlining why they make for a more secure payments option than paper-based alternatives.
Interoperability and increased flexibility
While they were earlier incepted as a medium to facilitate online transactions, digital payments tools such as wallets and e-vouchers have today ventured beyond just the online domain. With attached physical and digital cards, wallets allow users to make interoperable payments to online and offline vendors. Several vendors, especially bigger chains, today are also using NFC-enabled POS devices that allow digital vouchers to be accepted at offline outlets. This increases the usage flexibility and the potential use-cases for digital transactions as opposed to paper-based transactions, which are severely limited in scope and outreach.
The joy of social gifting through digital channels
Sending gifts to friends and family have traditionally been a very irksome task that involves searching for the perfect gift, packaging it and storing it before handing it over to the intended recipient. This task is made even more arduous when the person in question lives in a different city, as there is always a risk of loss or damage that increases exponentially with the distance involved.
This is what makes digital gift vouchers such a delightful proposition. By allowing the most relevant gift coupons to be sent to near and dear ones across geographies, digital coupons enhance the convenience and selection flexibility for the user. Not only that, some digital wallets also enable data gifting which opens up avenues for a lot more beyond the normal, such as gift-wrapping a cricket lover an evening of cricket or dedicating music on streaming apps to family & friends! Moreover, digital vouchers also generally have higher validity than paper-based vouchers and can be distributed and redeemed with ease.
This is, in particular, extremely beneficial to corporate businesses looking to reward their top performers during R&R initiatives. By simply adding a gift voucher to an employee’s digital wallet, employers can easily disburse financial incentives to their employees at the touch of a button without any hassle.