Is Digital Banking Doing well in India?

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“It is a huge market. There are hundreds of mobile banking apps and hundreds of e-wallets. All of them serve the same purpose using different means,” said Sony Joy, Chief Executive Officer of Chillr. “If there is any direct competitor of ours, it is cash.”

With rising digitization in India, many options have come into the market and all of these are finding the way for online payments/cashless payments.

What are the goals and achievements that digital India has been moving towards?

• The goal is to make banking cheaper, more efficient and easier to access for all of the country’s citizens.
• The move to mobile: Mobile banking that moves in your pocket, the value of mobile banking transactions jumped by 46% to Rs.49,029 crore in last December (2016).
• The micropayment revolution: The micropayment in India ranges from Rs. 10 (through PayTm) to an infinite amount. With 200 million users using PayTm, the process and usage of micropayment have become very easy and is being used by almost everyone in the urban areas. It is the small towns and the rural areas that need to be targeted now.
• Digital banking offers yet another advantage: It allows people and business owners to obtain credit. Having decent credit score is quite important these days and hence the digital payments lure more and more people.
• The credit and debit cards: With demonetization, even the towns have started moving towards using cards for payments. The only problem being 2% charge that bank takes and the shopkeeper denies to pay from his own pocket.

“Digitisation is a process, and the payment habit needs to be nurtured. Demonetization is the tipping point in driving customers to use non-cash modes of payments,” said Rajiv Anand, executive director at Axis Bank. “We will see more innovation in this space as banks work to make payments frictionless. There’s been a sudden surge post-demonetisation, but it may stabilize at a certain level.”