When John Collison, one of the brothers who co-founded the U.S.-based online payment service Stripe Inc, wanted to gain insights about cutting-edge payment technology, he flew to India to understand the Unified Payment Interface (UPI), an ambitious project to bring digital banking to 1.2 billion people in the country.
The co-founders of Stripe, who have joined the ranks of the world’s youngest billionaires, have set up an office in the country to take the UPI’s learnings and implement them in their home market in the U.S.
The UPI allows a customer with a bank account to transfer money using a smartphone as easily as sending a text message.
India is expected to leapfrog the world in digital payment technology, said top industry experts and tech entrepreneurs at the The Huddle session on “Cashless India: A road map for the future” here on Sunday.
Sharad Sharma, co-founder of the software product think tank iSPIRT, said nowhere in the world was a system using digital as a basis to solve problems at the bottom of the pyramid.
He said even in the U.S., digital was a technology meant for the elite. “If we succeed, we will become the beacon for the rest of the world,” Mr. Sharma said.
The Centre has roped in Mr. Sharma, Infosys co-founder Nandan Nilekani and other tech entrepreneurs as invitee members of a committee to help get more Indians to adopt digital payments. He said that by April, the number of wallet-UPI transactions was going to exceed debit-card transactions.
“We are witnessing a change never experienced in the past in India and outside,” said R. Chandrashekhar, president of the IT trade body NASSCOM.
Mr. Sharma said that going cashless was imperative. This is because, despite nationalisation and target banking, financial inclusion had not reached millions of families in India yet. “We can ignite growth among 400 million people,” he said.
Asit Oberoi, group president, Transaction Banking Group, Yes Bank, said that managing cash involved a huge cost and digitisation created a lot of efficiencies. “Our kids are growing up using the Internet. They are going to be more comfortable with digital [transactions],” he said.
Sameer Nigam, co-founder of PhonePe, a Bengaluru-based mobile payments company, said the government’s ID platform Aadhaar had offered a lot of convenience to the citizens. “Convenience trumps giving up your little bit of privacy right,” he said.
However, is the Indian financial system ready for the digital payments? Mr. Sharma said the banking system was going to change more in the five to 10 years than it had changed in the past 50 years. “Let’s not make the past as the predictor of the future. That is a fallacy that is no more appropriate. Remember India embraces change,” he said.
He asked who would have thought Aadhaar would become the quickest system to reach a billion people even faster than what messaging app WhatsApp could achieve.
However, Mr. Chandrashekhar said that becoming a cashless society was not going to be a smooth ride. There are challenges such as lack of reliable Internet connectivity and cybersecurity issues. “What happens when people face problems. Is there a quick remedy and is there quick justice?” He said there was a need for raising awareness of security among the people.
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