How Online Payments are Empowering and Enabling Rural India

The primary aim of demonetization was to wipe out black money. But a more serious issue gained predominance: online payments in rural India. According to the World Bank, 19Cr citizens don’t have a bank account. 24Cr citizens have never made a single transaction despite have bank accounts. These staggering numbers indicate the huge gap that needs to be bridged between rural and digital India.

Ever since, in an attempt to address this problem, the government has come up with many initiatives. Some of the ways the government is bridging the gap are with the introduction of various modes of payments, both offline and online payments. Some of them are Aadhaar-based payments, SMS-based payments, and mobile ATMs. Mobile ATMs are available to individuals who have an account under the Jan Dhan Yojna. This makes digital money more accessible to rural India.

Not integrated into the conventional methods of banking, rural India is in dire need of digital and financial literacy. In an attempt to address this challenge the government is also introducing various programs to help aid their growth via online payments.

Some of the other initiatives to encourage online payments are:

BHIM UPI:

Unified Payments Interface is a “real-time payment” system which enables instant money transfers between two bank accounts via an app.

With apps like Google Tez and many more helping push the UPI agenda, it is safe to say that UPI is empowering digital India with a keen focus on merchant experience and recurring payments. It also promotes a cashless economy and enables responsible fiscal behavior making it easy for a common man to sign up to saving accounts and insurance schemes.

The government is all set to launch UPI 2.0. It will be a new and improved version with multiple added features and benefits. The new version aims at providing a safer and secure payment experience with easier authentication processes.

India Post Payments Bank:

With a potential target of reaching out to more than 80 million users in the next 5 years, IPPB focuses on creating a safe harbor for handling your money. With over Rs. 1450 Crores worth of investment and about 650 branches which become the controlling hub for over 1.55 lakh post offices PAN India; empowering rural India, with a click of a button.

GST Cashbacks:

In an attempt to promote cashless transactions in rural and semi-rural India, the government will now enable volunteering states to provide a 20% cashback to customers using one of the above-mentioned modes of digital payments (subject to a maximum limit of Rs. 100). The government is testing the cashback offer with volunteer states and is preparing a software and backend would to roll out the pilot.

Re-Look at the MSME Laws:

A vast part of rural India has micro, small and medium enterprises. The GST Council has also promised to relook into the law, procedures and the rates related to the MSMEs; to help ease operations. While larger businesses bring in more tax, smaller businesses help increase the employment rates in the country. Hence, its safe to say enabling rural India and MSMEs will directly impact the economy of the whole country.

The rise of Micro-financing Institutions:

Two-thirds of India fall under the rural category. It is hence vital for us to empower and enable rural India. With the digital payments becoming the face of transactions today, it is important to make sure our rural India has both technological and financial awareness. With the vast number of initiatives launched by the government, it safe to say, India is heading down the digital path of progress.

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