The founder of Microsoft Bill Gates praised India’s Digital Payment System and said that Covid-19 across the world had demonstrated the value of digital payment systems for facilitating emergency relief payments.
Bill Gates said that India has a “great” digital network, reliable and low-cost connectivity, and will be the cheapest 5G market. During India’s G20 presidency, a session on ‘Building resilient and inclusive economies- the Promise of Digital Public Infrastructure’ was held in New Delhi, where the Microsoft founder spoke about India’s digital identity Aadhaar, payment infrastructure, and rapid progress in bringing more people into the formal banking system.
Gates thinks that other countries have to replicate this model if they want to improve their public infrastructure. India and Singapore last week linked digital payment systems and that “is a very worthwhile goal”.
Digital Payment Market
With a projected market opportunity of US$ 1.3 trillion by 2025 and over 42,000 active fintech firms, India is rapidly emerging as the global hub for the fintech industry. Over the eight years from 2014 to 2022, funding for over 550 start-ups surpassed nearly US$ 22 billion. Furthermore, with a fintech adoption rate of 87%, India has emerged as a prime location for the digital payment revolution, far exceeding the global average of 64%. The JAM trinity (Jan Dhan-Aadhaar-Mobile), digital public goods infrastructure, and the India Stack are blessings for Indian start-ups looking to use fintech to cross-sell products, making it an important revenue source for business owners. Historically, most economies have faced significant barriers to financial inclusion due to societal attitudes, legal frameworks, and prohibitively high transaction costs.
Digital technologies offer a powerful means of removing these barriers and increasing access to banking and the financial system. After Covid-19 Consumer preferences and behaviors were shifted in favor of digitally assisted modes of Payment. The “India Stack,” a unified software platform, is the world’s first national digital infrastructure, providing a low-cost digital push and leapfrogging at least two financial technology generations.
A “stack” refers to all of the technologies needed to run an application, such as programming languages, architecture, libraries or lexicons, servers, user interfaces and experiences, software, and developer tools such as APIs that connect databases and software. In other words, India Stack is a technological foundation that combines a set of Application Programming interfaces (APIs) that serve as a technical link that allows two software programmers to communicate with one another.
Financial services have been at the forefront of this innovation and transformation in India, with exponential growth in digital service adoption. It enables governments, businesses, start-ups, and developers to use this one-of-a-kind digital infrastructure to catalyze the evolution of the digital ecosystem.
In 2011, only 35% of Indian adults had a bank account. However, due to the government’s evolving impetus, the number had surpassed more than 80% by 2017, bringing the total population to approximately 1.4 billion in the digital age. Prime Minister Mr. Narendra Modi, launched a website for global solutions, ” India stack global,” in honor of Digital India Day on July 4, 2022. The India Stack Knowledge Exchange (ISKE) Program 2022 was presented to the global community to showcase India Stack solutions and goods, as well as to invite other nations to adopt and customize India Stack solutions for their use, thereby contributing to the repository of Global Digital Public Goods.
The India Stack’s success is already having an international impact. Singapore and India signed a high-level agreement in 2018 to “internationalize” the India Stack (UPI). While Aadhaar is popular in the Philippines, Morocco, Vietnam, Myanmar, and other countries.
How Digital Payment System helps to improve the Economy
The advantages of digital payments extend far beyond the ease of use that many people in developed economies associate with the technology. Digital payments in developing economies provide immediate benefits to both senders and receivers, as well as the ability to increase citizen access to affordable financial tools. Sending, paying, and receiving money is less expensive and more secure with digital financial services. Digital payments enable people to move away from the constraints of a cash-only economy and into the financial mainstream. The use of digital payments for remittances rather than cash benefits poor people in emerging markets while also contributing to financial development. This could also help alleviate concerns about remittance transparency and traceability. The reason Bill Gates Praised India’s Digital Payment System
Advantages of Digital Payments
Faster, easier, and more convenient
One of the most significant advantages of cashless payments is that they speed up the payment process and remove the need to fill out lengthy information. When you are on travel there is no need to the ATM or carry cards in your wallet. Many services, such as digital wallets and UPI and banking services are available 24 by 7 and 365 days a year, including bank holidays.
Economical and low transaction fees
Many payment apps and mobile wallets do not charge any service or processing fees for the services they provide. The UPI interface is one such example, where customers can use services for free. Costs are being reduced by various digital payment systems.
Waivers, discounts, and cashback
Customers who use digital payment apps and mobile wallets can earn a variety of rewards, discounts, and Waivers. Many digital payment banks offer appealing cash-back offers, which act as a motivator to go cashless.
Easy to maintain records
Another advantage of going digital is the ability to keep all transaction records. Customers can track every transaction, no matter how small the transaction amount.
Bill payment with a single application
Many digital wallets and payment apps have evolved into an easy way to pay utility bills. All utility bills, whether mobile phone, internet, electricity, or gas can be easily paid using a single application.
The control of black money
Digital transactions help the government keep track of things and, in the long run, it helps to control the circulation of counterfeit notes and black money. In addition, the cost of minting currency may be reduced, which may benefit the economy.
Digital payments are gradually gaining traction in India, and numerous apps in this sector are being developed. It has evolved into a simple and secure payment method.