A strategy is needed for accelerating growth of Digital Payments in India with a regulatory regime which is conducive to bridging the Digital divide
GN Bureau | November 7, 2017
People using their debit or credit card to make payments at shops has become a common sight after demonetisation took place on November 8, 2016.
At some places like the army CSD canteen, cash payment can no longer be done. Only cards are now accepted there.
The switch over from cash to digital payment has not been easy, but it has certainly taken place.
In fact, the volume of various digital transactions (including UPI, USSD including BHIM) increased by about 23 times with 63,80,000 digital transactions for a value of Rs 2425 crore in March 2017 compared to 2,80,000 digital transactions worth Rs 101 crore in November 2016.
Aadhaar Enabled Payments have increased from 2.5 crore in November 2016 to over 5 crore in March 2017. Immediate Payment Service (IMPS) transactions have also increased from 3.6 crore to 6.7 crore during the same period.
Interestingly, BHIM App created a new world record by registering 1.9 crore downloads in just four months since its launch in December, 2016.
"We have been working towards a digital India for quite some time. Digi Dhan is one of the initiatives which will become 'niji dhan' (personal wealth) of the poor. It will become the voice of the poor," said prime minister Narendra Modi on April 15, 2017.
Finance minister Arun Jaitley said on November 7, 2017: "Excessive dependence on cash has its own cost. It is not just cost but there is a curse of cash. It has impact on both society and economy."
He said there is a clear change taking place as to how India and Indians are spending money and the change is only in one direction. It will not happen abruptly but the movement towards a less-cash economy is very clear, Business Today quoted him as saying.
The Committee on Digital Payments constituted by the finance ministry under the chairmanship of Ratan P. Watal, principal advisor, NITI Aayog, in its final report recommended a medium term strategy for accelerating growth of Digital Payments in India with a regulatory regime which is conducive to bridging the Digital divide by promoting competition, open access & interoperability in payments.
The report recommends inclusion of financially and socially excluded groups and assimilation of emerging technologies in the market, while safeguarding security of Digital Transactions and providing level playing to all stakeholders and new players who will enter this new transaction space. It has suggested inter-operability of the payments system between banks and non-banks, up-gradation of the digital payment infrastructure and institutions and a framework to reward innovations and for leading efforts in enabling digital payments.
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