Table of Contents
How Does Voice-Based Payment Work?
How are Voice-Based Payments Changing Indian Fintech Sector?
What Does the Future of Voice-Based Payment Look Like?
The pandemic has spurred a transformative shift in the fintech industry, with a spotlight on the pivotal role of payments in digitizing global economies. The surge in voice-related technologies is reshaping online activities, particularly in shopping and transactions. The Reserve Bank of India is focusing on Conversational Payments for financial tech, integrating AI into digital transactions via messaging or chat. Voice assistants, backed by tech giants like Google and Amazon, extend across industries, foreseeing applications in finance, healthcare, retail, and advertising.
Read and find out why Voice-Based payments are supposed to be a new trend in the Indian fintech sector, changing the payments system in the country, in the coming years.
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How Does Voice-Based Payment Work?
Voice-based payment apps leverage voice recognition technology for fintech dealings, eliminating the need for cards and passwords. Users have to download/login to the app, link their bank accounts, and secure the account with a PIN. Upon activating the voice assistant, they verbally provide payment details, confirming the transaction without reentering a password.
Voice-activated transactions offer a seamless and secure financial experience across various domains.
- Peer-to-peer transfers: Peer-to-peer transfers are simplified by this fin tech revolution; users articulate payment details, verify, and, upon confirmation, recipients receive funds with ease.
- E-commerce transactions: E-commerce transactions become effortless as voice commands facilitate secure purchases without exposing sensitive card information.
- Credit card payments: Credit card payments are expedited through voice authentication, catering to individuals on the go.
- Utility payments: Moreover, utility payments, from mobile bills to rent, are streamlined by instructing virtual assistants to execute payments securely.
This transformative fin technology approach not only enhances convenience but also emphasizes the importance of robust security measures in voice-based financial interactions.
The Reserve Bank of India has introduced UPI 123Pay, a voice-based solution for feature phones. Users have to call a designated number, navigate the Interactive Voice Response (IVR), and validate transactions with their UPI PIN, ensuring a digitally secure and seamless process for voice-initiated financial transactions. This has got many fintech startups interested, for obvious reasons.
Read on – Indian Fintech Sector: Will Hyper-Personalization Be a Future Banking Trend?
How are Voice-Based Payments Changing Indian Fintech Sector?
Voice-based payments are reshaping the Indian economy, driven by a $5.89 billion global market in 2021 with an expected 10.9% CAGR from 2022 to 2030, according to Grand View Research. International banks like Barclays and Royal Bank of Canada have already embraced voice-enabled peer-to-peer payments, integrating with virtual assistants like Siri and Google Assistant.
In a landmark move, RBI Governor Shaktikanta Das announced the impending launch of Conversational UPI at the Global Fintech Festival in Mumbai. This innovative feature, known as Hello! UPI, facilitates voice-enabled payments in Hindi and English, with plans to expand to regional languages. Targeting accessibility, especially for seniors and those less familiar with digital interfaces, users initiate transactions with a voice command, confirming with their UPI PIN.
NPCI, in collaboration with AI4Bharat at IIT Madras, is developing payment language models to support this initiative. NPCI’s white paper, ‘Conversational Payments on UPI: Unlocking New Frontiers for Next-Generation Payments,’ underscores the exponential growth of voice search queries, with a remarkable 270% annual increase.
Adding to this transformative landscape is Bharat BillPay, introducing a nationalized number for bill payments across India. Through messaging apps or a simple missed call, customers can initiate payments, even without smartphones or immediate mobile data access. The BillPay Connect feature extends accessibility further, enabling voice-assisted bill payments through smart home devices or physical collection centers via payment soundbox devices, ensuring security and efficiency.
Conversational UPI and BillPay Connect represent significant strides in enhancing security and accessibility in digital transactions, promising a revolutionary impact on how Indians engage with and contribute to their evolving economy. Many of the top Indian fintech companies are pondering about how to make the most of this technology.
What Does the Future of Voice-Based Payment Look Like?
Since the implementation of UPI in 2016, digital payments have surged, now surpassing debit and credit card activity by 4.5 times. The payment industry is poised for a new era, dubbed Payments 4.0, with voice technology emerging as a central player. Voice-enabled payment systems, evolving in the fintech sector, are rendering traditional methods obsolete.
The National Payments Corporation of India (NPCI) is set to revolutionize UPI transactions by introducing an AI-powered voice bot system, expected to go live in the next two to three months. This system, akin to Amazon Alexa, aims to simplify UPI payments by allowing users to verbally communicate with the app, eliminating the need for multiple steps.
With the RBI extending voice facility accessibility to feature and smartphones, UPI’s reach is expected to expand, catering to a more extensive user base. Additionally, the regulator announces increased transaction limits for UPI Lite and NCMC, two major offline payment modes, further enhancing the versatility and accessibility of UPI transactions, which have already gained international traction in countries like Singapore, Bhutan, France, and Sri Lanka.
The future of fintech technology lies in voice-based payments, driven by advanced AI integration for personalized interactions and heightened security. As smartphone users are projected to reach 1 billion by 2026, voice-based solutions are seen as pivotal in bridging the digital gap, transforming how we engage with banks and conduct transactions.
Check out – India’s Economic Growth in 2024 and Beyond: Can Neo Banks Be a Game-Changer?
Fast Facts
- PWC anticipates an 80% increase in global cashless payments by 2025 and nearly tripling by 2030.
- Predictions indicate a 10.9% CAGR in the global voice-based payments market from 2022 to 2030.
- Businesses witness increased sales through voice solutions, with 28% of Indian online shoppers engaging in voice shopping.
- More than 83 million people in India are using voice shopping already.
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Conclusion
Traditional online payment gateways, reliant on IBAN verification and app-to-app linkage, need dynamic changes and evolution. Voice payments emerge as a groundbreaking alternative in the fintech industry, allowing users to authorize transactions through spoken commands, bypassing the need for PINs. Beyond enhancing security and convenience, voice payments are positioned to bridge digital literacy gaps, democratizing access to online transactions.
This innovative approach benefits both tech-savvy urban consumers and those in rural India, particularly feature phone users, offering a secure and convenient entry into the digital payment landscape. With voice payments simplifying the process, an estimated half a billion feature phone users can seamlessly engage in the world of fintech and e-payments, marking a significant stride towards financial inclusivity and a more accessible digital future.
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