• InduQin

India has crossed a billion monthly digital payments. Now, to a billion transactions a day

Google’s letter to the US Federal Reserve two months ago asking them to learn from Indian digital payments must be an unfamiliar feeling for the central bank. Indian regulators, used to lectures and advocacy from global firms and diplomats peddling their models — not intellectually different from Thomas Macaulay’s quip in 1835 that a single shelf of a good European library was worth the whole native literature of India — should be proud of reaching our target of a billion monthly digital payments. We make the case that digital payment transactions on the Universal Payment Interface (UPI) platform rising from 0.1 million in October 2016 to 1.3 billion in January 2020 represents the magic of entrepreneurs, nonprofits and policymakers working together. And gives us a new target — a billion transactions a day.

India was long a financially excluded nation — only 17 per cent of Indians had a bank account in 2011. The World Bank suggests it would have taken 50 more years for 80 per cent of Indians to get a bank account at the pre-2011 speed. Yet, we reached that milestone in 2018. How? A magical combination of political will (Jan Dhana Yojana and Aadhaar embedding), a proactive central bank (creating a non-profit market participant entity and leveling the playing field between non-banks and banks), and a technology stack with three layers (identity, payments, and data).

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