The PAYTECH Book

Taking PayTech to the Villages of India

By Vishal Gupta

Business Architect, Tata Consultancy Services

India is a great market for PayTech, with several players like PAYTM, BHIM, Google Pay and Phone-Pe present and thriving. In cities, people are adopting digital means of payment and digital payments are carving a niche in people’s lives.

I live in Gurugram, a city close to India’s national capital. I can go out without cash and manage all my expenses like travel, food, movies, grocery and medicines using payment apps. However, the real penetration of PayTech in India has a long way to go as these modes of payment are not readily available once you step out of the cities; 95% of the Indian economy is still cash-based, and 90% of merchants only accept cash payments. With over 600,000 villages across India, creating a cashless economy presents both a great opportunity and a significant challenge.

In November 2016, the Indian government carried out “demonetization”, banning 500 and 1,000 rupee notes in an attempt to curb the black market and encourage a cashless economy. This resulted in an initial push towards digital payments, but cash soon took over from digital again. The volume of digital transactions, which had increased in November and December 2016, declined by 20% in February 2017. The Reserve Bank of India (RBI) annual report released in August 2018 confirmed that 99.3% of demonetized notes were returned to the banking system.

With a large part of India’s population living ...