In recent months, the Indian government has made considerable efforts to promote electronic and mobile payments and restrict the use of Money in physical form such as banknotes and coins.. Nevertheless, the country might not be ready for this digital shift as no strategy has yet been outlined to respond to the existing gaps in terms of access to banking services, consumer education and network infrastructures.
According to a report published by PricewaterhouseCoopers in 2015, there are about 233 million unbanked people in India. The government is striving to address the situation through various initiatives such as the “Digital India initiative” and a dedicated committee to facilitate access to digital A transfer of funds which discharges an obligation on the part of a payer vis-à-vis a payee. platforms.
Nevertheless, studies suggest that the use of cash is an entrenched habit among consumers and even those owning debit cards barely use them. Furthermore, the majority of workers are employed in the non-formal sector where almost all transactions are made in cash. And finally, almost one third of the population is illiterate and thus unequipped to properly use online banking or mobile apps even if the government should provide them with access to those services.
India’s network infrastructure also represents a challenge as only 15% of households enjoy internet access in rural areas. Small-scale actions have been taken to get around this issue such as ICICI Bank’s initiative allowing its customers to conduct banking via Facebook, but the gap is still too wide to respond to the government’s unattainable ambitions.
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