Taku sees the transition to a cashless society as imminent. This leaves India with another challenge: Now, the largest economy in South Asia has to take a shortcut to welcome a new population that discovered the bank in the 21st century.
In countries with a bank account It is common – for example, in the United States, Canada and most of Europe – the adoption of mobile payment systems has been slow. This movement is the transition from cash to paper checks to debit and credit cards, and ultimately (in theory) to electronic payments.
However, India is on a different path. Unlike its Western rivals, India does not have a personal financial system. The country is building rules for e-payments and mobile wallets alongside the formalized economy. For example, before the monetization cancellation was announced, India introduced national plan provides broadband connectivity in rural areas. The country is currently expected to have 300 million more Internet users by 2020, marking it as the fastest growing digital economy in the world.
Ritesh Malik, a Delhi-based angel investor and founder of startup accelerator Innov8, explains: “As a nation, we have digital knowledge rather than literacy. the. “We have over 330 million mobile internet users, larger than the population of the United States. People may not be able to read, but they know how to upgrade their cell phones ”.
Through these rapid developments, India offers a glimpse into how America could thrive in the future. With Amazon just rolling out its first automated grocery store, Amazon Go, in Seattle, states are likely to move away from card-based payments. But because the United States already has a formal personal finance system in place, concerns over data security have arisen with digital payments. Much as 70% of people take public transport in San Franciscofor example, they say they do not trust the city to secure their credit card data (although 19% of those surveyed said they prefer mobile payments).
No matter how a country’s financial system is set up, there are still barriers to adopting mobile payments. “The main risk in rapid and widespread adoption [financial technology] Vinay Venkatraman, CEO of Leapcraft, a big data consulting firm in Copenhagen, says – wherever you are in the world – there are multiple systems and vendors trying to grab a share school at the same time. “In terms of security, it’s always been the weakest link in the chain that’s the problem. In this context, the solutions differ [are] competition and interaction, which will lead to errors, which will inevitably lead to a security breach ”.
In India, however, officials are hoping that electronic payments will help reduce tax laundering and evasion, as well as eliminate petty theft. That means citizens must accept the strict supervision of the state – from their own country or another – in exchange for any perceived benefits.
In India, this issue has caused controversy for Paytm. The sudden rise in popularity has led to a media backlash, criticizing the company has close ties with Chinese e-commerce giant AlibabaThe company owns 40% of Paytm’s parent company. No one knows who has access to the data of Indian citizens using the service, or the possible national security risks due to the strained relationship between the two governments.
Despite the challenges, the monetization process has made a radical shift to re-envisioning India’s huge informal economy as a data-driven digital marketplace. With a little bit of warning, the country has pushed its people and developers into the race of mobile payments with the world’s most developed countries. But whether mobile commerce can usher in the golden age of transparency and fairness remains to be seen – in the US and Europe, just as it is in India.