India Still Reluctant With Digital Payments

By Riya SethiWith the world adopting cashless transactions at a rapid pace, India has also witnessed a major change in the way the business transactions are conducted now. According to a recent report, the country is expected to be the fastest-growing in terms of digital payments transaction value by 2023 panning a CAGR of 20.2 percent.

But, for a cash-dependent economy like India, there are many hurdles on the way to achieve a complete seamless digital transaction business ecosystem. The country's exploding population and the economy's cash-reliant nature adds to the problem and makes the financial inclusion more difficult. A person's reluctance in carrying out a digital transaction can be attributed to a number of reasons like;

1.No Adequate Infrastructure
For an economy to go cashless, it needs to have a proper infrastructure in place that can help him make payments anytime, anywhere. India lacks the kind of infrastructure and most of the digital payment is smartphone reliant.
2. Cyber security
The issue of cyber security remains one of the biggest reasons that people shy away from transacting online. With an increased number of bank frauds and other financial scams, people prefer keeping cash-in-hand rather than depositing their money in some online wallet.

3. Transparency
Whenever an online payment is made, the transaction details are recorded and the record is easily accessible. This highly transparent nature of digital payments leaves people with no sense of security and trust, thus leading them to opt for cash instead. Moreover, people's perception that high transparency can invite more scrutiny from the tax department, makes people keep away from digital payments.

4. Lack of Digital Learning
Online transaction requires some level of digital learning and the complicated interface of digital payments makes it harder for people to undertake such transactions. A customer need to be very careful while carrying out a transaction as even a single mistake can lead him to lose all his money.

Though India's revolution towards being a cashless economy has started but the country still has a long way to go to break free from being cash-obsessed. The employment of correct infrastructure and awareness in the economy can help the country squeeze out the cash from the ecosystem.

• Several structural challenges are hindering the growth of digital payment scenario of the country wherein the solutions available only cater to the ones who are well versed with the cashless transactions.

• The Government can help accelerate the adoption of digital payments by introducing new policies and better framework.

• Digital payments in India are today heavily reliant on smartphones which tends to become a matter of concern in a country which is ranked the second most cyber attack affected in the world.