Sharma said this was done to simplify the communication and promotion of UPI apps. From a consumer perspective, the number of UPI applications can be confusing, he explained. “From a marketing and promotion perspective, it becomes very easy. Because people started associating Bhim with UPI. So now if you see Bhim anywhere, you connect directly to it as a UPI app, I can link my bank account and I can move money, ”he added.
However, according to an industry expert who requested anonymity, the grounds were not high enough.
Wallet and prepaid payment instrument (PPI) players must jump through hoops to communicate and process products and systems capable of interacting with banks within the UPI. The RBI rules on wallets also mean that customers can access bank-like KYC. They should be “agnostic”, the expert said, “whoever takes advantage of the digital space. This is a common view. Authorized issuers, including prepaid and wallets, must qualify as long as digital transactions are made by a bank or non-bank.”
Let’s get back to Rs 495 crore. Suffice it to say, this number requires organization. For the sake of comparison.
For the year ended March 2017, the government’s central budget has allocated Rs 817 (2 122.8 million) for teacher training and adult education. At the same time, it spent Rs 9,475 crore (21 1424.2 million) for the mid-day meal program and 10,484 crores (75 1575.9 million) for the Swatra Bharat Mission, one of the main initiatives of the government.
Now, this is not even an apple and orange comparison. It’s probably closer to Apple and Jackfruit – which doesn’t make sense. “No, I don’t think this is the right way to look at it,” says Nitin Pai, co-founder of The Taxila Institution, an independent think tank on public policy. “From a public finance standpoint, this is not even a rounding error, because, to be significant, it has to be Rs 10,000 crore.” Instead, we need to look at the cost of the cash economy that digital transactions replace. .
Cash controls everything around me
According to a 2013 study by the Fletcher School of Tufts University of America, the Reserve Bank of India (RBI) and commercial banks need to spend around Rs 21,046 crore (75 1575.9 million) a year to manage currency operations.
Sudhakar Ram, founder and CEO of Mumbai-based digital payments company that mobilizes merchants for UPI, said the government’s justification for promoting UPI was justified. He believes that it is necessary to bring about a change in behavior among the citizens. “There are at least one billion cash transactions at retail level in India every day. If we can get 15-20%, 200 million of them are converted. If I use a wide brush, 20% of that Rs. ) Saves, “he said.” Today, Beno has more than 47,000 merchants, and as of March 2019, about 10 million “There are about 50 million vendors in India and three million people do not have card machines, so there is a huge playing field to cover,
But more than a year after demonetization, cash still reigns supreme. This is an indicator of the number of debit card transactions in ATMs. In India, debit cards are mainly used to borrow money from ATMs. For March 2018, RBI data showed 774 million transactions in ATMs. The number of transactions at Point of Sale (POS) machines is less than half, only 318 million.
However, the annual growth (16.6%) of POS transactions exceeds that of ATM transactions (9.13%), indicating a growing preference for digital transactions. But this is actually misleading. Industry observers say digital transactions increase at a 20% clip each year. It remains to be seen whether the pace can accelerate to make cash transactions digital.