Digital Transformation of Digital Payment and...

Digital Transformation of Digital Payment and Settlement System in India

Author Name : A. Venkatesh Boopathy, Dr. J. Kamatchi Eswaran

ABSTRACT

The ongoing spread of COVID-19 has become one of the biggest threats to the global economy and financial markets. To contain the impact of the corona virus outbreak, India, like many countries across the globe, is taking several measures, including a nationwide lockdown; limiting movement of the entire population; shutting down public places and transport; and urging the public to stay  indoors, maintain social distance, and work from home.  The resulting economic disruption is huge and the short- term decline in activity for businesses, both large and small, considerable. With economic growth expected to be severely hit, the financial outlook of the digital payments sector is no different and will follow a similar trajectory, at least in the short term. But the industry’s stability and potential for innovation will play an invaluable role in rebooting the economy in the new normal.

With the vision of becoming a cashless economy, the Reserve Bank of India along with National Payment Corporation of India has made concerted efforts to popularize the modern electronic mode of payment. Through this study we intend to understand and investigate the various facilities and products provided by the RBI. This system has been bifurcated into the physical payment segment and electronic payment segment on the basis of technology used. India being a cash dominated economy had huge physical payments in terms of both volume and value, in the past. This trend is gradually changing, aiming at $1 trillion market for digital transactions, as per the Economic Times. Through a primary research of 107 urban respondents it was discovered that factors such as safety of user information, ease of usage and discounts, cash backs etc. encouraged customers to use electronic payments over physical payments. These respondents also thought that it is an easy technology to learn, but still the reach of the same is still very limited. Moreover, there is a strong correlation in the occupation of the user and his preferred mode of payment. The benefits of the modern electronic payment are yet to reach all the sections of the society. Hence, the RBI along with the Government of India continues its accomplishment in creating innovative payment services and facilities, so that its accessible by the maximum users across the country. It is strongly believed that once the users get familiar with the technology, the future of the Indian economy will be brighter and better.

Key words- Electronic payment, cashless economy, banking, financial inclusion, Indian economy