Demonetisation, the Indian government initiative to cut the use of cash, has boosted the adoption of digital payments in a country where cash has traditionally been king.
In this article Srinivas Nidugondi, head of mobile financial solutions at Mahindra Comviva, provides an insight into the current state of payments within India and how the government is pushing to digitise a country where banknotes and coins, deeply rooted in cultural and religious traditions, are more than just a medium of transaction.
The article begins by laying out the cashless payment methods available in India and the infrastructure for bank- and operator-led digital payments solutions before explaining the reasons for the government’s decision to demonetise and the impact of demonetisation to date, especially in rural and semi-urban areas.
Nidugondi then looks at the particular challenges posed by the diversity of the Indian population, the lack of internet connectivity and smartphone penetration in large parts of the country, and the differences between urban and rural communities in terms of awareness and technology. He also identifies possible routes for developing the existing ecosystem by, for example, introducing a unified payment acceptance medium and maintaining a ‘light-touch’ regulatory system in order to encourage further innovation.
This article has been written by Srinivas Nidugondi, head of mobile financial solutions at Mahindra Comviva. It forms part of NFC World’s What’s New in Payments report and has been sponsored by Mahindra Comviva.
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This item is part of What's New in Payments.