Unified Payments System eyes 1bn deals by year-end

 KOCHI: Even as India and the whole world are fiercely debating the issue of privacy of digital data as we are moving fast towards a cashless society India has a different story of big accomplishments on this front

Highlighting the success of the Unified Payments System (UPA) Nandan Nilekani, Infosys chairman and architect of Aadhaar,  said the UPI platform has witnessed 172 million transactions by February, 2018 against just 100,000 transactions until October, 2016, the month before the demonization in India.

“My estimate is that this will go to a billion transactions by December. We see a massive leap in payment is happening.” “India is now doing 1.5 to 1.8 billion authentications a month. Authentication is very important because in a digital world, proving who you are is the essence of participation. Digital authentication allows you to create mobility, choice and convenience for people,” he said.

Stating that the benefit of direct transfer began with subsidies for LPG, pension, scholarships and other entitlements and in the coming years, he said soon it will be used for state programmes.

There is a similar proposal for electricity where instead of subsidising the price of electricity, it is provided at market price and subsidised through cash transfer. For state electricity boards it would mean unbundling the financial dimension from the business of electricity which they are in,” he added.

India is creating a data infrastructure for its people in a way that empowers them, unlike in the West where the data is in the hands of a few, Nandan Nilekani said.

India will be probably the first country in the world to have data empowerment architechture at the scale of one billion people, he said in his keynote address at the #FUTURE Global Digital Summit organized by the Kerala government here.

“About 1.2 billion people use Aadhar. India has about 850 million bank accounts linked to Aadhar, of which about 550 million are unique bank accounts. This Aadhar-linked bank account is the fundamental basis for direct benefit transfer,” Nilekani noted.

“India runs the world’s largest direct benefit transfer system and so far the government has transferred Rs100,000 crores into people’s bank accounts using this platform.”

He said the system has massive implications for the economy in that it stops money going through multiple layers and its leakage.

Regarding financial inclusion, he said the last four years had seen 300 million new bank accounts opened and its correlation to Aadhar, because it is easier for people to use an electronic KYC (Know Your Customer) and open an instant bank account.

“We are approaching an era where everybody has a digital ID number, a device to communicate with and a bank account. This is fundamental digital infrastructure. Mobile, bank account and Aadhar are three pillars of a digital world and everyone will have all these three things, Nilekani said.

“The significance of this is that for the first time you have population-scale infrastructure. You can bring in products, innovations and products using this infrastructure. You can roll it out en mass at scale very rapidly to a billion people. So this means that it has the potential to create productivity in the economy at a far rapid pace than ever before. A good example of that is the digital signature,” he elaborated.

 

Leave a Reply

Your email address will not be published. Required fields are marked *