The last decade has been revolutionary for payment systems around the world, especially for growth-stage economies like India. Digital payments are swiftly taking over the traditional payment systems and becoming the much preferred payment method across the country. Given the convenience offered by digital payments and their increasing popularity among the masses, India is continuously accelerating its efforts to bolster its digital payments infrastructure.
As part of these efforts, the Reserve Bank of India (RBI) recently launched a new digital payment mode called UPI123Pay that will enable the feature phone users to make direct payments via UPI. Presently, the UPI payment facility is only limited to users with smartphones and internet access.
While the government aims to further expand the digital payments ecosystem in the country, there are some speculations about the probable demerits of this decision as well.
Expanding Financial Penetration
Although a majority of mobile phone users in India use smartphones, a part of the population still uses feature phones. Like any other cutting-edge facilities, the feature phone users cannot leverage the benefits of digital payments. So, bringing feature phone users in the mainstream digital payments system is one of the prominent aims behind the latest announcement.
Moreover, the users will not need internet access to make payments. They only need to link their bank accounts with feature phones to use the UPI123Pay policy. This will make payments easier and faster, as well as attract more people towards digital payment methods.
Is it all Sunshine and Rainbows?
This announcement has grabbed headlines and raised curiosity among people, however, there are some things that the government may have to work upon. This facility will certainly bring more people under the digital payments ecosystem which might raise several security concerns. There are high chances that the feature phone users may not be acquainted with new technologies, software, etc. So, the user interface has to be easy and adaptable. Moreover, there has to be a robust marketing plan to ensure this technology reaches the masses and more people can leverage it.
The Future of Digital Payments in India
As the mobile phone penetration in India is increasing multiple folds, number of people turning towards digital payments is also increasing. This decision taken by RBI thus seems to be a promising step towards strengthening India’s digital payments ecosystem.
If UPI123Pay becomes successful, India will become a fully cashless economy soon!
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