We have seen implementation of invisible payments, using proprietary technology and standards, which are applicable for specific customer segments. This approach is in contrast to the efforts of the Government to promote a seamless and interoperable ecosystem. It is therefore critical for regulatory bodies to define common standards for implementation of such systems. Standards already defined for National Common Mobility Card (NCMC) and Unified Payments Interface (UPI) can be leveraged to achieve this. Guidelines can also be defined for the integration of such systems with new age technologies including Internet of Things (IoT).
Customer awareness and adequate disclosures
Invisible payments may lead to impulse buying Customers may be left unaware about prices charged for services availed until they receive notifications. This may result in disputes with customers and efforts to promote adoption of digital payments may be adversely affected. Hence clear communication to the customer about the service, the way it operates, the transaction flow and pricing is critical. Moreover, the customer should be able to cancel the service at any point in time.
Also invisible payments should not be the only payment mode, and the customer should be able to avail other modes of payments as well.
In line with the previous two points, it is critical to clearly define the framework, accountability and responsibility of all the participants. Clear guidelines related to dispute management, chargebacks, transaction reversal and voiding, among others are critical. This will help to boost customers’ confidence in such initiatives. Furthermore, there should be guidelines relating to the underlying technology, investments, requirements of availability, Disaster Recovery (DR), Business Continuity Planning (BCP), etc.
Data security and privacy
Customers’ data protection through robust security mechanisms has gained significant importance in the wake of breaches across the world. Security and authentication are even more critical for invisible payments, in view of the nature of their construct. Breach of a person’s digital identity, theft of mobile devices, sip swap or compromise of biometric credentials may lead to fraudulent transactions. Therefore, the RBI needs to define guidelines for such forms of payments. Efforts can also be made to augment security by detecting fraudulent transactions based on behavioral analytics, analysis of usage pattern and velocity-related checks.
If implemented right, invisible payments can bring about significant innovation and transform the customer experience across real use cases. Strategic partnerships with payment companies, FinTech players and merchants can drive innovations. Moreover, invisible payments can generate a large number of data points. Customer behavior can be analysed to offer customised offerings.