In cashless societies, there is very little dependence on cash transactions. Money is exchanged and recorded in the electronic digital forms. In the UK, it was reported last year that 1 in 7 people no longer carries or use cash. In contrast, in developing countries like India, less than 5% of all payments happen electronically.
Recently, the Indian government banned currency notes of higher denomination to curb the circulation of black money. This move will probably help the government to improve its surveillance to bring down money-laundering and expose tax cheats. With demonetization, the key gainers were online payment networks like Paytm and Mobikwik that saw 18 X increase in payment transactions. With 5 million payment transactions a day, Paytm says they have seen 700 per cent increase in traffic and 3x growth in downloads.
Mobile Payment app – a step to boost cashless transaction
India had 76.47 billion currency notes in circulation in 2012-13 compared with 34.5 billion in the US. It is a challenge to make India a cashless society. But as a step to boost cashless transactions across the country after demonetization, National Payments Corporation of India (NPCI), the organization responsible for all retail payments systems has introduced an app named Bharat Interface for Money (BHIM) to carry out payments, without having to rely on third party players. Encryption for BHIM is supposed to be in line with what a Google Wallet or Apple Pay is using. The infrastructure needs lot of improvement and the app is presently available only for android users.
The BHIM app has three levels of authentication to make the transaction more secure. The user will have to sign up for UPI-based payments on their bank account, linked with their mobile number, and complete three level of authentication, including device ID, mobile number, and the UPI pin.
To draw the difference between BHIM app and mobile wallet like Paytm or MobiKwik, the app user will need just a bank account which can be used to link online transactions, whereas money from a Paytm or Mobiwik can be send only to someone who is using the same wallet.
Five Best Practices to take note of before setting up an online business
Nearly 70 per cent of current online transactions are based on cash-on-delivery (CoD). But demonetisation has triggered behavioural change among online users. E-commerce players are seeing increase in the number of transactions and number of new customers. To cash in on the opportunities, companies such as Snapdeal and Paytm have launched a new mode of payment called “wallet-on-delivery (WoD)”, wherein the payment is done by transferring money digitally when their package is delivered.
To set up an e-commerce business is not very difficult, but to have a customer stay on your site, shop and to have them visit again is wherein the challenge lies. One of the chief reasons why customers shy away from a site despite having good products is the security aspect. Online payment tools like Paypal, digital wallet systems, NFC payments by electronic card, electronic banking and bill payment systems, help people make cashless transactions. As an e-commerce business owner, the tricky aspect is to protect your website from being hacked.
Listed here are few best practices and prerequisites that every e-commerce site need to follow for data security.
· Go for a secure eCommerce Platform
Among the many open source and proprietary e-commerce platforms, Magento, PrestaShop or WordPress WooCommerce are the most popular ones, known for their extensive security framework. Choose one of these secure e-commerce platforms to build your website on.
· Maintain Compliance and Certificates
If the consumers believe that an e-commerce site is doing everything possible to secure their transactions, they are more likely to do business with them. The vendor should ensure that their server is maintaining PCI compliance requirements. Further, if you intend to do business with overseas companies, PCI DSS certification is an essential requirement. With guaranteed security, business efficiency is ensured. SSL certificate validates the identity of users, encrypts data and thus secures connectivity between the end-user systems and your website.
Use External Payment Systems
With so many fraud cases happening, people are becoming more concerned about the information they share online. It is better to use trustworthy external payment systems like Skrill, PayPal or WorldPay for a professional checkout experience. By doing this, you’re no longer directly collecting financial information from your customer. You can be stress-free and the customers will feel more confident using a secure certified payment gateway on your site.
As payment processors handle a gigantic volume of cardholder data, compliance is essential to the security of cardholder information. Thus, the payment service is obliged to be PCI compliant and protect the consumer data.
· Have Multi-layer Authentication
For securing your online store from hacking attempts, add extra layer of security by implementing two-factor authentication. The user needs to provide two means of identification, which is typically the username/password, and a code generated in real-time called OTP, sent to the shopper’s verified phone that expires after a short duration.
· Use a VPN on Public Networks
It is better to avoid making financial transactions on public networks as they are vulnerable to being intercepted by malicious users. A Virtual Private Network (VPN) service can prevent a third-party from inserting itself between you and the server.
The e-commerce industry faces a challenging future in terms of the security risks it must forestall. Nonetheless, by implementation the above mentioned security protocols and best practices, e-commerce businesses can go a long way to assure their consumers to shop fearlessly.
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