Till some time back, India had done just around 18 million digital signatures based on the conventional way of using dongles. Over the past two years, however, India has done 21 million digital signatures using e-signatures and, by the end of this year, GST alone will take this up to 300 million (8 million businesses into 37 annual returns). India did a total of 3.2 billion transactions with debit/credit cards in FY17—this year, it will do 3.7 billion transactions using UPI/BHIM/AEPS, up from 0.4 billion in FY17.
So what, is the obvious retort. If an eSign replaces a, say, DocuSign or a UPI replaces a Master/Visa, it’s really all the same, isn’t it? Well, not quite. For one, the costs of an eSign or a UPI are a fraction of the systems they are replacing. While a DocuSign has packages ranging from $50 per month, an eSign costs around Rs 2 per signature. And while debit/credit card costs range from 1-2% of transaction values, UPI costs—when they are finalised—are likely to be free for transactions below Rs 1,000 and 45 paise per transaction beyond that.
All of this, and more, has been made possible by the group of innovations collectively known as the IndiaStack, all of which have been built upon the Aadhaar platform. While Aadhaar itself is a database of biometrics, even as it was being rolled out, Nandan Nilekani was working on all manner of uses to which it could be put to. UPI and eSign are two such, and others include flow-based lending, eKYC and DigiLocker.
Flow-based lending allows users, based on their unique Aadhaar number, to get loans based on their income flow—SME merchants selling on Amazon can generate such flows as can poor people getting regular Direct Benefit Transfers from the government. While just around Rs 6,000 crore of such loans have been disbursed so far, iSPIRT estimates this will rise to Rs 100,000 crore next year—there are already 47 companies offering flow-based lending solutions.
DigiLocker looks like a combination of a DropBox and a DocuSign, but it is the combination that is deadly. Anyone with an Aadhaar number can have a free DigiLocker and can get digitally-signed documents from government departments in their locker—once a school-leaving certificate is digitally signed and in your locker, anyone using this later knows the certificate is genuine. While over 175 crore documents like driving licenses are already ready to be delivered into your Aadhaar-enabled DigiLocker, in a country where fake certificates abound and where getting such certificates from government departments is time-consuming, the importance of this can never be overstated.
What makes the IndiaStack and Aadhaar different from most existing solutions is that they are not proprietary—that means anyone can build upon them—and, because they are publicly-owned, they tend to be very low cost. A UPI solution, because it is an open one, can be offered by both banks and non-banks and that keeps the transaction costs low; the fact that eSign is easy under an Aadhaar system means there can be many providers and that has kept the tariffs very low.
This, keep in mind, is based on what the IndiaStack has achieved so far, but the potential is enormous. Theoretically, it can replicate a lot of what closed systems like Ola/Uber or an UrbanClap do. Apart from being a market-place, one of the reasons people use these services is that the drivers or carpenters/plumbers/masons get ranked by users and, in a sense, this tells potential users how good they are—if a driver consistently gets poor marks, he will be forced to quit. But imagine if someone built an app that allowed users to simply rank drivers/ carpenters/plumbers and this was linked to their Aadhaar numbers; they could then develop a profile independent of an Ola/Uber/UrbanClap—this could either give rise to several platforms that take a lower share of their earnings or even in their existing platforms giving them a better deal.
Now imagine the possibility of the government—the ministry of external affairs is toying with such an idea right now—offering such technology solutions to various countries as a solution to some of their problems; or to use India’s brain-power to come up with tailored solutions to specific problems. Keep in mind the Jaipur-foot probably did more for India’s image in Afghanistan than the aid India may have given.
Most big powers try and harness their technical prowess and use it an instrument of state policy, and there is no reason why India should not be doing the same. Being able to carry this off, of course, will mean India will have to completely reorient the way it approaches diplomacy right now—apart from private sector entrepreneurs of traditional sectors like, say, automobiles, start-up talent should also be harnessed before strategies are developed for various countries. Getting it right will take a long time, but there is no reason why a start shouldn’t be made by finding ways to offer IndiaStack solutions to a variety of countries not as well endowed as India.