Tuesday, October 3, 2023

Cashless digital Indian economy: Utopia or reality


By Raj N

Digital payments witnessed a quantum jump as the unlocking began. In Q2 of 2020-21, UPI payments recorded more than 80% jump in volume and close to 99% in value terms compared to the same period in the previous fiscal, accelerating pace towards digital India.

When was the last time you remember having visited your bank branch? Well, surely in case of many of us it would be difficult to even recollect of having physically visited the bank branch and spoken to an officer across the counter. That is probably proof enough of how we have moved away from the physical world to a digital world. From salary credits and bill payments to tax processing and beyond, almost every aspect of financial transaction processing today is more in the digital format.

The above typically answers whether a cashless digital Indian economy is utopia or reality. The increasing penetration of the internet across the length and breadth of the country and availability of higher bandwidths of data at affordable prices has fueled a rapid transformation from physical to digital.

Improved security in financial transaction processing with various forms of checks and controls such as two-step verification has added to the confidence of people who have now become comfortable as well as adept in everything online.

There is empirical data which shows that as a nation we have rapidly adopted the digital way of life. According to reports, digital payments witnessed a quantum jump as the unlocking began. In Q2 of 2020-21, UPI payments recorded more than 80% jump in volume and close to 99% in value terms compared to the same period in the previous fiscal.

Digital India

In fact, September 2020 UPI reported more than 180 crore transactions in volume and close to Rs. 3 lakh crore in value. Today 174 Banks are using UPI services with customers of more than 140 Banks having access to NPCI’s BHIM app. According to reports, the app has been downloaded by more than 15 crore people as of October 2020.

In fact, the pandemic seems to have been the biggest enabler of a digital India. Given the compulsions of living in a contactless world and adapting to it has forced the adoption of a digital life across various aspects. The need for adopting the digital way of life has been the most in the financial world. Government and regulators have been encouraging a digital movement by providing enough and more incentive.

A higher degree of innovation to improve the systems further from the FinTech world helped achieve faster penetration of the digital economy. Consumers and Trade, both have adopted to digitization in a big way.

Digital India

According to media reports, more than 50 lakh POS terminals were deployed in the September 2020 quarter. The highlight of this number is the mix of the private and public sector. Nearly 70% of these were from the private sector while 26% came from the Public Sector Banks. 4% of these represented by the Payments Banks.

With so much happening and more to come, India certainly seems to be heading towards becoming a truly digital economy very soon. It will be among the very few countries soon to have gone fully digital with its economy. As they say, the proof of the pudding lies in tasting it, and we will soon taste the fruits of becoming a truly digital economy. Utopian stories can wait or wound up!

Also Read: Invest young, cherish life long

(Raj N is the Founder and Chairman of Zaggle, a FinTech company.)

(Disclaimer: The views expressed in the article above are those of the authors’ and do not necessarily represent or reflect the views of Autofintechs.com. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.)


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