India’s digital payment revolution owes much of its success to the JAM Trinity – Jan Dhan, Aadhaar, and Mobile – and the Unified Payments Interface (UPI).
In recent years, India which is South Asia’s economic powerhouse has seen unprecedented growth in the digital payments revolution across the sector. Because of the government’s emphasis on digitizing the financial sector and the economy! The JAM Trinity (Jan Dhan, Aadhaar, and Mobile) and UPI (Unified Payments Interface) have had a significant impact on the transformation of India’s digital payment landscape.
The Role of JAM Trinity and UPI
As it is the land of a billion aspirational people, India is the fastest-growing economy. In the past few years, the hugely growing economy has undergone a significant technological revolution in governance. The government has successfully implemented various programs for last-mile delivery of government services happening in seconds.
The government’s strategy to digitize the financial sector and economy has led to a consistent increase in digital payment transactions. Financial inclusion has become one of the country’s important national objectives.
Payment transactions have steadily increased in recent years as part of India’s strategy to digitize the financial sector and economy. In addition, promoting financial inclusion has been one of the significant objectives of the country, and thus, there have been joint efforts to achieve it.
JAM Trinity: The Key Enabler
The Jan Dhan, Aadhaar, and Mobile (JAM) Trinity are at the heart of India’s transformed digital payment landscape. Jan Dhan Yojana is one of the world’s largest financial inclusion initiatives. Aadhaar is a simple but effective method of verifying individuals based on biometric information. JAM Trinity has helped lay the groundwork for a Digital India. In which citizens can access a wide range of government services directly.
Jan Dhan accounts, Aadhaar cards, and mobile phone connections have all contributed to the establishment of a Digital India. In which a wide range of government services are made available directly to citizens. It has enhanced ease of access without the presence of any intermediary (middlemen).
Digital Payment Ecosystem
The land of diversity has prioritized the promotion of digital payments in order to achieve “Faceless, Paperless, Cashless” status. In the land of innovation, digital payment transactions have grown at an unprecedented rate, with modes such as BHIM-UPI, IMPS, PPIs, and the NETC system transforming the digital payment ecosystem. The introduction of e-RUPI, a cashless and contactless digital payment instrument, is expected to play a significant role in making Direct Benefit Transfer (DBT) more effective in the country’s digital transactions.
- During the last three years, digital payment transactions have registered unprecedented growth.
Easy and convenient modes of digital payment, such as Bharat Interface for Money-Unified Payments Interface (BHIM-UPI); Immediate Payment Service (IMPS); pre-paid payment instruments (PPIs) and National Electronic Toll Collection (NETC) system have registered substantial growth and have transformed digital payment ecosystem.
- Digital payments have been rising steadily.
It is growing in both Person-to-Person (P2P) and Person-to-Merchant (P2M) categories. Along with this, traditional payment methods such as debit cards, credit cards, National Electronic Funds Transfer (NEFT), and Real-Time Gross Settlement (RTGS) have also shown significant growth.
BHIM-UPI has emerged as the preferred payment mode of users. The Government also launched the digital payment solution e-RUPI. It is a cashless and contactless instrument for digital payment. It is expected to play a major role in making Direct Benefit Transfer (DBT) more effective in digital transactions in the country. All these facilities together have created a robust ecosystem for a digital finance economy.
UPI: Revolutionizing Digital Payments
UPI has emerged as one of the most popular digital transaction tools in India. The cutting edge technology is powering multiple bank accounts into a single mobile application and combining several banking features into one.
UPI has been termed a revolutionary product in the payment ecosystem. Launched in 2016, it has emerged as one of the most popular tools in the country for carrying out digital transactions. UPI is an instant payment system developed by the National Payments Corporation of India (NPCI).
It empowers multiple bank accounts into a single mobile application. It has the technological ability to merge several banking features, seamless fund routing, and merchant payments into one hood.
To further strengthen and popularise the interface, Prime Minister Narendra Modi launched the BHIM-UPI App during the inauguration of the ‘DigiDhan Mela’ on December 31, 2016.
UPI has gone a long way in making digital payments a habit, and in firmly placing India on the track toward a cashless economy. In the month of August 2022 alone, 346 banks were live on the UPI interface. 6.58 billion financial transactions have been carried out for a total value of nearly Rs. 10.73 lakh crores.
- UPI currently constitutes well over 40% of all digital transactions taking place in India.
It has given a boost to small businesses and street vendors as it enables fast and secure bank-to-bank transactions even for considerably small amounts.
It also facilitates quick money transfers for migrant workers. The technology is convenient to use as it requires minimum physical intervention. Technological advancements make it possible to transfer money simply by scanning a QR code. UPI has also been a savior during the Covid-19 pandemic. The adoption of UPI lead expanded rapidly due to its ability to allow easy, contactless transactions.
Future of Digital Payment Systems in India
The government is going above and beyond to make India, the land of progress, a global leader in digital payment systems. India’s emerging FinTechs play a critical role in the continued growth of digital transactions.
The government’s efforts, combined with the people’s willingness to embrace new technologies. The government’s recent initiatives have transformed India’s digital payment landscape. As a result, India is positioning itself as a leader in creating digital assets that can serve as a model for many other countries.
Conclusion
Dear reader, thanks for reading this latest update on India’s digital economy. Let me brief you, “The journey in the land of opportunity to becoming a digital economy has been remarkable. JAM Trinity and UPI have played important roles in promoting financial inclusion. It is helping in making digital payments a habit. In the future, emerging FinTechs will play a critical role in the expansion of digital transactions, benefiting the entire digital payments ecosystem. With its emphasis on digital infrastructure, a land of hope for billions of people is poised to become one of the world’s most efficient payment markets.”
(Copy Right @ India CSR)
