The Covid-19 lockdown may have affected digital payments, but the government could use the crisis to boost these.
Digital payments did cross the Rs 4,000-crore target set for FY20, but photos of women account-holders in the rural areas queueing up inches apart from each other in front of the bank branches/ATMs to withdraw the coronavirus-relief the government has given them, at a time when social distancing is being stressed upon, shows the gaps that remain in digital adoption. While the government has done its best to provide a base for digital transactions to grow in the country by allowing companies to build on its UPI interface, it has not been able to make the process easy enough for adoption in rural areas.
This is indicated by the fact that, as the country went into a lockdown, National Payments Corporation of India (NPCI) data showed a dip in digital transactions. This is not to say that the government has not been successful in promoting digital. In a recent interaction with FE, the COO of NPCI, Praveena Rai, had said that they were looking at an increase in payments to supermarkets and medical stores, and data also indicates a rise in volumes for Bharat Bill Payment System transactions. But, more needs to be done to make digital pervasive.
A good idea would be to capitalise on technology. While demonetisation and cash discounts from UPI players in early years did put adoption of digital means on the fast track, a lot of it was also because the government kept innovating. It first released UPI and then allowed transactions via mobile number and Aadhaar using BHIM. But, of late, this has slowed. However, many people will turn to online for payment of utilities and bills, and engage in contactless payments to avoid the corona-fomite risk. If the government can capitalise on this, it will go a long way in promoting digital.