Digitizing India’s Payment Ecosystem
India – the country with the largest democracy in the world signifies its importance in having a flexible yet secured payment gateway ecosystem which can help the people of the country for an easy and convenient way of doing the day-to-day transactions with advantages unmatched by the traditional payment system. “Cashless, Faceless and Paperless” are the main agenda for promoting the new payment system in the country with a long term vision plan on successfully executing the Digital India Programme by the Govt. of India.
The Need for Digital Payment Service: Technology today has reached and grown to such an extent that even the complex of things can be performed in a fraction of a second. In terms of financial assistance, till a few years back we could not imagine that money transfer could have been so easy and convenient, irrespective of the years-old traditional method where people have to go and queue in long lines in the banks to transfer the money or carry a large amount of cash which increases the risk of theft and other anti-socio activities. As such, there was a big gap in overcoming these issues which led the Govt. of India think of new and innovative tactics for a digital payment ecosystem for the common masses. The issuance of an enormous amount of paper currency by the Reserve Bank of India was also one of the important reasons for moving toward a new technology-based digital payment ecosystem in the country.
Mode of Digital Payment Services in India: With the advent of smartphones and mobile applications, people of India started getting their desired services right just through a click of a button. The entire banking system came into the palm of the hands of common people and thus made it easy for the Government to introduce various modes of Digital Payment services in the country among which one of them was the Unified Payment Interface or popularly known as UPI which later became one of the most desired methods of digital payment services in the country. Apart from UPI, the Government of India and banking institutions also promoted some of the existing methods of cashless services like Mobile Wallets, POS, Internet Banking, Micro ATMs, AEPS, Banking Cards etc.
Introducing UPI Technology: Today, if anyone in India wants to transfer money to their known ones, 90% of people’s first choice would be the Unified Payment Interface. UPI has been a revolution in the Indian finance sector and this can be stated by the fact that according to NPCI; the governing body for UPI, has recorded over 45 billion transactions in the fiscal year 2022 and is expected to reach 217 billion (21,700 crores) transactions by the financial year 2026. It is worth mentioning that companies like PhonePe, Google Pay, Paytm etc. also play a vital role in the growth of this digital revolution in the country.
Role of Technology in Changing the Ecosystem: As it is rightly said by N. Chandrababu Naidu – “In information technology, money is not the issue. Willingness to implement and execute is the issue”; the desire to change the age-old payment system in the country allowed Information Technology to play its role as the primary medium to help the citizens of India experience the easiest yet a safer way of peer-to-peer (P2P) as well as person-to-merchant (P2M) payments system which forced Indian consumers to helm the technological aspects used in the financial sector. Introduction to QR-based payment facilities and transferring of funds through mobile numbers, just by the use of an application or swiping of payment cards in POS machines by the use of NFC Technology are some of the highlighting prospects in making this structure so popular among the masses.
The Growth: The MSME sector in India has grown exponentially over the recent years, thanks to the various startups in the form of fintech companies rising to the cause. Here IT companies like BoldTek also play a major role in serving entrepreneurs with the development of mobile-based applications which can be used for various online payment-related services along with other features.
Lastly, we can say, the growth of the Digital Payment System in the coming years is huge and here India can act as a role model in showcasing its technological advancements to the rest of the world which might help the country in making its dream possible of a 1Trillion Dollar economy country.