Digital Payments: The way for

Prosperous Digital India

Prime Minister Narendra Modi had once said: “I dream of a digital India where Mobile and
E-banking ensures financial inclusion”. Today his vision is gradually coming to life with the
new initiatives launched by the Modi-led Government. In addition to this, there are also a
growing number of innovative fintech companies offering various digital payment solutions.
There have been several policy and digital infrastructure changes post India’s demonetization
including Goods and Services Tax (GST), financial inclusion and new payment systems such
as Aadhar-enabled payments & UPI to further boost the digital payments sector.

Benefits of Digital payments

When we talk about digital payments than it must be noted that they are not just about
convenient and secure transactions - they present a tremendous opportunity for the financial
inclusion of 1/3rd of the country’s population that still remains ‘unbanked’.

Better reach: By taking a step in encouraging electronic payments in a predominantly cash

economy, millions of unbanked Indians from across the country can be brought into the fold
of banking.

Better Convenience: With the birth of new business models such as mobile wallets, prepaid
cash cards, NFCs, QR Codes, mobile banking apps and traditional banks jumping into the
fray as well, will contribute to willingness of people to go cashless.

Boost to Startups: Large scale integration will help acquire scale and reduce competition,
increasing diversification and partnerships between banks and startups.

Less Risk of Cybercrime

The Constitution of India guarantees, under Art. 21, the Right to life and personal liberty.
This right includes the right to privacy. The nine-judge Bench of the SC in Justice KS
Puttaswamy v. Union of India1, upheld right to privacy as a Fundamental Right. A prudent
citizen would very justifiably be concerned about the mala fide usage of their personal
information provided for various digital banking apps. However, the Aadhaar enabled
payments, which has come to be known as the most advanced and sophisticated infrastructure
1
Justice K.S. Puttaswamy (Retd.), and Anr. v. Union of India and Ors, AIR (2015) SC 3081.
may facilitate law-enforcement agencies to take care of problem of terrorism to some extent
and may also be helpful in checking the crime and also help investigating agencies in
cracking the crimes.

TRARI (Telecom Regulation Authority of the Republic of Indiana) launched the Aadhaar
based e- KYC for mobile connections and re-verification of existing customers (both post-
paid and prepaid) by carrying out e-KYC. Moreover, high-level of encryption is one of the
fundamental pillars of data safety. A lot of emphasis has been put by the Cyber security
experts on encryption to secure data from falling prey to cyber criminals.

Unauthorized sharing of sensitive personal information attracts liability to compensate under

the Information Technology Act, 2000.Therefore, these features ensures that no one can
access private data of an account holder without his/her consent.