Author: Shailaz Nag, COO & Co-Founder, PayU India
The online payment industry is worth over 20 billion US dollars currently and expected to grow many folds in the time to come. Experts believe that with a significant 169% jump in the prepaid payment instrumentation (PPIs) in 2014-15 alone, payments is going to be the next big thing to happen to the online industry. There is no doubt that payment industry is fast spreading itself to become an integral part of Indian economy. The latest integration of the industry is the real estate business. Yes, that’s right. The rising payment industry boom has reached the real estate sector as well.
Before we move forward let us give you an idea of the size of real estate sector in India. The Indian real estate market size is expected to touch 180 billion US dollars by 2020. Ironically the majority of this money is part of the black money. While India has stepped up its pursuit of alleged black money stashed in Swiss banks, there is a substantial sum of black money which is present in our country itself. One of the major sources of black money in India is the real estate sector. It might sound surprising, but the real estate sector is about a tenth of the Indian Economy, and the extent of black money floating in it is huge.
The rise of the payment industry has led to added convenience and ease of online buying for the consumers, but very few of us know that it has also led to curbing of the black money menace. The entry of online payments in the real estate business has reduced the possibilities of cash transactions, thus marginalizing chances of black money flow.
Now large chunks can be virtually paid online at, even from your smartphone to buy a property of your choice. This goes without saying that it adds a lot of safety as one doesn’t have to carry a bag full of cash on the registry day. At present there are over 200 major real estate players in the country out of which over 45 have already started accepting online payments.
Some of these real estate companies have even made sure that they accept the even small amounts of token money which is generally either Rs 11,000 or Rs 21,000 through online transactions. With no cap on the amount to be transferred, large chunks of money can be transferred which are essential for the real estate business. By proposing tax breaks on debit and credit cards, the government is also providing support to the payment industry and encouraging people to pay online.
We have already seen payments industry pushing the growth of E commerce, online grocery, food ordering etc in the recent years. The rising boom of online payments in India has given way to many new entrants in the industry such as Paytm, Mobikwik, oxigen etc who are majorly wallet driven payment companies.Some of whom are even burning millions through cashbacks, rewards, free recharges to gain publicity and lure more and more consumers to transact through them. The magnitude of this growth can easily be called a digital revolution which has led to a mushrooming of online marketplaces, millions of transacting consumers and heaps of venture capital investments.
There is no doubt that this growth has been driven by rapid adoption led by the increasing use of smartphones, tablets and speedy access to internet through broadband, 3G etc. However one of the key reasons behind it, is the ‘trust’ which has been generated through secured online payments that have encouraged more and more users to welcome online industry with open arms in India.
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