The Indian household has reached a new era of seamless digital payments. Households as important units of the Indian economy have successfully adapted to the rapidly changing financial technology and have also catalyzed its growth. This impact has not been one-sided, as the people themselves have been affected by this advancement of digital finesse. Let’s see how e-payments are impacting the grassroot sector of the Indian economy.
Effortless payments
The advent of quick and easy digital payments has fundamentally changed how citizens handle their monetary affairs. Just how ATMs provided instant cash and improved the liquidity, digital payments have taken it to the next level by nearly eliminating the need for physical money. A phone and and internet connection is all it takes to make a payment, open a bank account, invent in stocks, or book a plane ticket to the other end of the globe. This convenience in handling money has boosted the purchasing habits of the Indians.
Rural and global reach
A report from 2020 found that around 79% of Indian households use some form a third-party digital payment system. With most of India’s population still residing in rural areas, this is a commendable feat. Success of fintech sector coupled with government efforts has allowed for the permeation of online payment systems to the remotest part of the country. This has led to information sharing and development of rural sectors.
Digital payment systems also made cross-border payments swift and accelerated the concept of globalization. One can send money online to another country smoothly which has not only boosted foreign trade but also relieved the Indian diaspora to send remittances to their families.
Support to MSMEs
In a contactless world during the pandemic, the digital payment system brought customers and businesses together to work in harmony. As people started becoming comfortable with cashless buying and selling and UPI apps, many businesses, especially start-ups and small businesses got the chance to reach out to a greater audience. This system also helped entrepreneurs to procure loans easily and cut the cost of logistics by going fully digital and focusing on their products and services.
Rise in cybercrimes
One major hiccup that has disrupted the air of Indian households is the increasing number of cybercrime and frauds. According to a report, the number of cybercrime complaints rose from 9.7 lakh in 2022 to 11.5 lakh in 2023, with 60% of them being complaints of financial frauds. This creates distrust and hesitation on the part of customers to go fully digital, and thus, a lot of Indian households, apart from having a digital presence, still believe in traditional financial security systems like investing in gold.
From payment of an electricity bill to buying and selling of property online, the Indian households have not only adapted to the digital infrastructure but made it their own and customized it to suit their convenience. Rise in cyber crimes has made people alert and fostered a sense of vigilance which has further prompted the dissemination of digital knowledge.