Challenges and Opportunities for Digital Payments in Rural India: Impacts, Initiatives, and Policy Considerations | Chapter 11 | Contemporary Research in Business, Management and Economics Vol. 2

 In this study, the factors that impact and support towards digital transactions in rural economy is reviewed taking stock of current trends, market analysis, readiness of the infrastructure and the stakeholder accountabilities, to gain insights to the critical success factors to be addressed. The economic progress of India is greatly influenced by its rural areas. Therefore, it is imperative to improve the digital payments model trends in rural India in light of the impact of demonetisation, emerging changes in ICT penetration, and ongoing digital initiatives for rural populations. It is imperative that the shift to digital payments, even in the rural economy, is accelerated in light of the advantages such as increased ease of doing business, potential to reduce the parallel economy, and transaction transparency. Some of the revolutionary developments in the recent past like launch of many digital wallets like – Paytm, Mobiwik, Free Charge etc. and government launching many UPI (united payment interface) solutions and BHIM app for smooth transition to digital payments, there are significant developments taking place.

Stats from the market research also depict considerable rise in digital transactions post de-monetisation period. In terms of challenges, certain key factors like limited options for digital transactions based on feature phones, issues of awareness towards digital transactions, constraints of PoS transactions etc are some of the intrinsic issues that impact the digital transactions. Considering the quantum of opportunities that are unfolding for market dynamics of digital payments, if the challenges that are discussed are addressed and improved solutions in terms of UPIs, mobile wallets, and digital transactions with more secured features, ease of transactions and reduced cost of managing the digital payments could lead to more potential developments and supporting in improved conditions of digital payments processing in rural sectors.

Despite the fact that the social trends are being very positive in rural segments for embracing the digital payments, still there are considerable challenges too in succeeding the paradigm shift. The futuristic steps like enabling digital payment transactions based on Aadhar numbers could be a game changers if handled effectively. It is imperative from the review of research reports, statistics over the digital payment trends, that if some of the key macro challenges, business limitations and consumer related issues are addressed, there could be potential developments envisaged in the process.

Author(s) Details:

S. Md. Shakir Ali,
Department of Digital Business, Lithan Academy (eduCLaas Pte Ltd.), Singapore.

Md. Wasim Akhtar,
Council for Social Development (CSD), Hyderabad, India.

S. K. Safiuddin,
Department of Management, Maulana Azad National Urdu University, India.

Please see the link here: https://stm.bookpi.org/CRBME-V2/article/view/13697

Keywords: Digital payment, rural ecommerce, UPI, BHIM, M-wallet, digital divide, rural and urban India, government, PoS, digital transactions, demonetization, opportunities for digital payments