Digital Payment – A New Era?

I keep hearing from everywhere how digital payments have taken over from cash payments and how India is leading the world in this respect.  While most of my grown up years, I have seen my parents making digital payments, I can definitely see a substantial increase since the pandemic.  Even the household helps today take their payments through GooglePay/ PhonePe/ Paytm etc.  I understand from my parents that a decade back India was mostly a cash based economy.  I always wonder what has brought forth this paradigm shift?  Yes Covid 19 pandemic and the need for touchfree payment definitely gave it a big push, not only to India, but to the whole world. Then why and how is India the front runner in the field?  Is it only because of India’s technological prowess?  Probably not.  From what I can see in my everyday life, while technological prowess and more importantly availability of digital skill in India has been a key factor, there are a few other factors that have played an important role.  First of all with Ubers and Olas, with Swiggies & Zomatoes, with Dunzoes & Swiggy Genies and the list goes on, there was a need to pay digitally in order to extract the full benefit of these services.  Secondly, in 2015, the Indian government had launched its Digital India programme, where one of the objectives was to achieve a “faceless, paperless and cashless” status for financial transactions at grass-root level to serve twin purposes of (a) printing less currency and (b) bringing more transparency in its movement. The Government of India and the Reserve Bank of India, initiated policies to make digital payment affordable and accessible to all Indians.  Thirdly and very importantly, the average age of Indians is 29.5 years making us one of the youngest populations in the world.  And the youngsters of today need everything at their fingertip instantaneously….who hasn’t heard this from their parents?  And yes as a result digital payment, which is faster, simpler and easy to access anywhere anytime, has become popular.  All of these together, have contributed to India becoming a global leader in digital payments.

To quote some facts, at the Davos World Economic Forum, the Honourable Minister for IT & Electronics, Ashwini Vaishnaw, announced that in December 2022, India’s digital payment transactions has reached US$ 1.5 Trillion.  And even more encouraging is a recent report by PhonePe and Boston Consulting Group, which concluded that India’s digital payments market will more than triple by 2026!