Further, e-commerce in India is still largely based upon small sales and purchases and cash on demand is the preferred mode of payment in India. The concept of cash on demand may hamper e-commerce in India. Further online payment systems of India are maturing at this stage.
For a full fledged e-commerce infrastructure and system of India to operate we need a strong and secure online payments mechanism. Although an integrated banking system is in pipeline yet the present internet banking system, online payments mechanism, etc are not up to the mark. Further, the present banking, financial and regulatory environment of India need to be streamlined.
Cyber crimes and financial frauds have further shaken confidence of Indian e-commerce customers in online payment methods. ATM frauds, credit card frauds, internet banking frauds, etc are flourishing in India as Indian banks and financial intermediaries are not paying enough attention to cyber security.
The Reserve Bank of India (RBI) has in the past asked Indian banks to ensure robust cyber security but Indian banks have still not implemented the same. RBI has now issued a strict warning to Indian banks that if they do not ensure cyber security now, RBI would take strict action against them.
Cyber law due diligence in India is another area that e-commerce and online shopping platforms must take care of. Cyber law due diligence for Indian companies is one of the most frequently litigated aspect in India. Lack of cyber law awareness and cyber due diligence awareness is the main reason that many websites and companies have found themselves in the net of Indian laws.
Online shopping and e-commerce in India must be encouraged but at the same time legal and cyber security issues must also be taken seriously. Online payment players and e-commerce stakeholders must keep these aspects in mind while doing business in India.