Rising Digital Payments could very well knock out Cash in India

Sunil Param : Head of Content and Communications at Pine Labs

By Sunil Param | June 13, 2022

Sunil Param is the Head of Content and Communications at Pine Labs.

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They say never write off the underdog in sports and there are many sporting spectacles from history that add credence to this belief. Be it the sensational Wild Card to Wimbledon Champion Goran Ivanisevic in 2001 or the underdog Muhammad Ali (then Cassius Clay) who defeated world heavyweight boxing champion Sonny Liston in 1964 or if you're a cricket enthusiast you would recall Kapil's Devils stealing the thunder from the mighty West Indians to win India's first cricket world cup in 1983.

Drawing parallels to Digital India, there is no denying the fact that in India, Cash is still the King. Having said that, the King is also in his waning years, with Digital Payments as its heir to the throne waiting to take over. This melodramatic opening aside, cash in circulation has increased but one cannot overlook the flourishing and fast-emerging ecosystem of digital payments in India. When UPI was first launched as a pilot in India by the then RBI Governor Dr. Raghuram Rajan in April 2016, who would have thought that come April 2022 and in just six years there will be nearly 316 banks live on the UPI platform and as many as INR 9.83 trillion worth of transactions in a single month . That's the reality of today! UPI as a digital payments option has taken off in a big way in India and consumers today like the idea of making payments via their UPI-enabled digital payment apps in India.

If this wasn't enough, add to it the fact that India's first-ever sovereign-backed digital currency is on the anvil and expected to be unveiled in early 2023 as per the announcement made by the Center and the Reserve Bank of India.

Truth be told, India has come a long way when it comes to its currency of choice. From asharfis and cowrie shells of historic times to coins and paper notes of the independent era, India's tryst with the tangible currency stretches beyond few centuries. The use of cash is ingrained in the DNA of the country and its people and as they say old habits die hard. While the transition to a completely cashless India might not be as quick as one might have expected, or in fact plausible in its entirety, the knock on the door by Digital Payments is now turning into a thud as Young India gripped by the various digital payment platforms in India is fast embracing this ongoing digital revolution.

The unsung heroes behind the burgeoning digital payment platforms in India are the government and the banking regulator for their commitment to the Digital India campaign. The fact is that there always existed a Digital Divide between India and Bharat. Majority of the population in India historically lacked access to banking and that's no secret. That hasn't stopped the government from initiating pathbreaking reforms like the Pradhan Mantri Jan-Dhan Yojana (PMJDY), a national financial inclusion mission to provide access to banks who don't have them. The digital literacy initiative of Pradhan Mantri Gramin Digital Saksharta Abhiyaan (PMGDISHA) which empowers people in rural areas to be digitally literate. Not to forget the streamlining of the QR code payment infrastructure in the country by moving towards interoperable QR codes.

All these reformatory steps have further bolstered the ecosystem of digital payments in India and while cash might dominate the India of today, the writing is on the wall that digital payments are fast catching up and are becoming the preferred mode of offline and online payments in India. The underdog will soon upset the reigning Champion and history will be re-written once again. We believe that! Do you?