For the past few years, India’s youth has been driving forth the adoption of digital payments and services. Nowadays, however, the easy, quick and secure nature of the digital economy is winning over more consumers and businesses than ever before.
Profit Meets Public Utility
The boom of cashless payments in the Union has improved the financial performance of many industries and services. Consumer markets, social sectors and financial circles have been radically changed in the past decade. Many of us live, work, play and shop with the help of electronic payments, available both online and in person.
The post-pandemic reality only boosted the importance of digital transactions, with small merchant increasingly willing and able to accept UPI and contactless payments. Behaving and consuming in a digital environment comes natural to millennials and especially gen Z users. But the revolution has also impacted communities in smaller towns and even rural areas.
Many financial technology (fintech) solutions have proven their worth on the domestic market and abroad. The Reserve Bank of India (RBI) has even introduced a payment platform for feature phones, called UPI123. It is intended to allow UPI transactions even without and Internet connection and a smartphone, experts claim.
The Centre has, without a doubt, done much to promote investment in digital infrastructure, tech solutions and e-business synergies, particularly within the vision of an independent Digital India a few years form now. On the other hand, some publicly run segments are lagging behind the private sector, including important e-government services and the popular Sikkim online lottery.
RBI and the GoI have set up, however, a Payments Infrastructure Development Fund (PIDF) which aims to improve the digital payment system in less populated areas. Street vendors have been acquiring, as a result, POS terminals and other basic digital means for transitioning to more digital operations. In turn, consumers and businesses have given a decidedly positive feedback.
New Financial Services Spring Up
In the past few years, desi startups and tech incubators have produced or adopted a series of affordable fintech solutions. Most of them support QR, UPI, mobile and Aadhar-linked payments. Fierce competition has pushed companies to offer various credit and financing solutions within their paradigm of digital operations. Buy-now-pay-later schemes also work in favor of the Union’s adoption of digital payments and standards.
Neo-banking solutions also perform Know Your Customer (KYC) checks quite rigorously, while many provide their services instantly and with the help of technology. The fact that store purchases, lifestyle services and many daily tasks can be paid on credit only increases consumption and ultimately GDP.
Cross-border transactions have also seen much improvement. Global clearance systems have exploited the power of fintech, cloud-based solutions and API in a sector which has already gone beyond simple digital payments. The National Payments Corporation (NPCI) has struck an agreement with the Abu Dhabi Monetary Fund to offer new services and extend the acceptance of RuPay and UPI outside the subcontinent.
The RBI has already announced the imminent launch of its digital currency, a solution that can further improve the nation’s financial integration and the security of cross-border payments. Better transfer systems and more financial inclusion will lower costs for everyone involved. Banks often tap into the outreach and distribution know-how of fintech startups while the latter do it with the client pool of traditional banks.
Technology has done plenty to stimulate the adoption of cashless and digital transactions. Yet, India is still reported as being largely a cash-based market – for nearly two-thirds of its consumers. Efforts are needed to improve the legal framework and local digital infrastructure. Government support is seen as indispensable in keeping up investor interest, as well as the competitiveness of the digital market.
Public authorities on state and central levels need to speed up the adoption and accessibility of many socially relevant services. Industry analysts list security and ease of use as primary topics to be addressed.