I hadn’t visited an ATM in many months, perhaps years. There used to be one around the corner from where we live. Since we were going out for a few days, at my age, I thought it might be prudent to withdraw some money. Just to be on the safe side! On reaching where the ATM used to be, in its place I found a shop selling seat covers and auto accessories. As I stood there puzzled, a grizzled middle-aged onion-potato seller smiled from behind his push cart. ” The ATM you are looking for closed down long ago, sir” he said. “No one comes here anymore. So they closed it. Every payment is done digitally these days”. He pointed happily to the QR Code he exhibited on his hand cart. “All of us are using this these days! You don’t have to carry cash any more.”
Hearing this from a hand cart vendor reminded me that we are now in a new India. A very different one from the days of my childhood in the 1950s and 1960s. Then we would have counted out each note and coin carefully, rubbing the note to make sure two notes were not going out in place of one! Today, a click and the transaction is done.
This message was reinforced recently at a hospital. I saw an elderly lady watch bewildered when the bill for her husband was settled with a few clicks on her son’s smartphone. I could relate to what went through her mind. Years ago, getting the patient discharged from the hospital would have been a major operation in itself! It would involve withdrawing money from the bank, carrying it carefully and paying it at the hospital so that the patient would be discharged.
For us in India, at work or at home, in urban areas and increasingly in rural areas too digital payments have overshadowed the traditional cash payments. The figures speak for themselves. Finance Minister Nirmala Sitharaman told the Parliament in her budget speech that India saw 7,400 crore digital payments of Rs 126 lakh crore through UPI in 2022.” (For those who may not be familiar with the terms, “lakhs” and “crores” commonly used in India: 100,000 makes 1 lakh and 100 lakhs makes 1 crore).
Yes, indeed the Unified Payments Interface (UPI) introduced in 2016 has taken the country by storm. Payments through Phone Pe, Google Pay, Pay Tm and other mobile App based platforms account for 42 % of all transactions. The older payment modes such as the credit cards and debit cards- once considered quite sauve and chic- had a share of just 7 % and 14 %, and are falling rapidly year on year.
The pandemic created havoc in many ways but it did help in strengthening the roots of the digital payments systems. Everyone and his uncle – especially in India’s cities and towns- started using online shopping, online payment gateways and the like based on several factors, key amongst them:- speed, convenience and reliability. Apart from person to person payments, there are many examples where digitisation has changed the way we live. One success story has been in the toll collections in National Highways. Earlier, there used to be long queues at the toll gates while people counted out notes laboriously. Today, thanks to FASTag and such methods, not only has the system become streamlined, saving valuable time but the numbers have also increased substantially. In 2022, toll collections at national and state highways brought in Rs 50,855 crore- an impressive 46% more than the previous year!
The use of mobile phones has been a major contributor to this galloping pace of progress for digital payments. In past years, politicians -especially in the Opposition – were skeptical whether our people would be able to use such sophisticated systems. Today, India has 1.2 billion mobile phone users with 600 millions smartphone users. Even in remote places, you will find the ubiquitous mobile phone and in its wake- social media!
Apart from having a large user base, India has become the world’s second largest manufacturer of mobile phones. The Economic Survey said the out put had increased from 6 crore units in 2015 to 31 crore units in 2022.
Those who wish to go through an easy to understand primer on digital payment will find this article on Digital Payments in India in Easebuzz to be of use.
So we have to move with the times. The writing on the wall is clear. Year after year, we shall see more advances in technology which will make our lives easier. Unfortunately, this applies equally to fraudsters too! To protect ourselves, we must learn best practices to stay safe and be cautious when we transact online.