According to a recent Visa report, ‘Accelerating The Growth of Digital Payments in India, A Five-Year Outlook’, India’s net cost of cash is 1.7 per cent of GDP. Due to the burden of cash on the economy, efforts have been made since the last few decades, by multiple governments to encourage the uptake of digital payments in India. Then came the mother of all: demonetisation. It gave an unprecedented push for the adoption of digital payments in India. The central government and state governments have been taking multiple steps, under the Digital India mission to shift towards digital modes of payments.
Rajasthan Payments Platform (RPP)
The approach overall has been to come up with a comprehensive platform for the citizens to make the payments wherever they are and with whatever means they can pay, e.g. DoIT&C, Rajasthan has designed a uniform payment gateway service – Rajasthan Payment Platform (RPP) that integrates banks, mobile wallets, credit cards and debit cards for seamless electronic and mobile payments. RPP will allow government departments and organisations, in Rajasthan, for two-way electronic payments. Citizens can make payments – taxes, utility bills, fees, etc, to the respective departments with ease. In the same way, departments can release funds to beneficiaries, vendors and others.
Hitherto, departments used different payment gateways to facilitate the citizens in availing services of their respective departments. For this, departments have to undergo the extensive process of signing agreements with various banks/payment gateways followed by technical integrations.
To ensure the effective implementation of the project, the integration with various departments, like e-Sign of Government of Rajasthan, Raj Sewadwar, various banks and payment aggregators have been made. The number of transactions as collection and disbursement module was 1,240,784 and 290,134 respectively in 2016-17.
It was ensured under the concept of ‘Suraaj’, that is, good governance that every e-governance initiative is first implemented at the village level, that is called the last mile, but Rajasthan considered it to be the first mile. “As the Chief Minister believes reaching the key beneficiaries first, who are at the village level. The project is then implemented at Gram Panchayat level and subsequently to districts covering the complete state,” says Akhil Arora, IT Secretary, Rajasthan.
Farm loan waiver payouts: Use of digital payment in Maharashtra
The Government of Maharashtra has also gained traction in the area of digital payments and it is also in the process of providing multiple payment options to the citizens. “Farmer suicides has been a major issue for the state and the farm loan waiver provided to the farmers was done via an end-to-end online process, for the first time in India. A total of over fifteen thousand crore was disbursed to the farmers,” informs S V R Srinivas, IT Secretary, Maharashtra. The money was disbursed through RTGS and net banking. The entire process, from farmer application to the disbursement, was done online. Millions of loan accounts have been settled through the said process.
The Aadhaar database was ready. On top of it, the state has used Relational DB systems and applied fuzzy logic in order to target the right recipient of the farm loan waiver. “The objective is to disburse the waiver to the eligible farmer by matching the data with the Aadhaar database application data with the government, and the data with banks,” adds Srinivas. The attempt is to reach out to the right applicant and avoid faulty disbursements to fraudulent applications.
The government is also encouraging the district collectors to open Aaple Sarkar Seva Kendras (ASSK) in the villages. This year, about four to five crore services have been delivered through these centres. Digital payments are also done in the ASSKs.
Recently, the state has put into production the MahaDBT portal. “A total of 37 schemes have been onboarded, which will expand to about 100 schemes in the next one year. The disbursements will begin soon. In the first phase, approximately three-four million students will be paid close to four thousand crores,” says Srinivas.A Maha Wallet platform is also being tested, which will be rolled out soon. The Maharashtra Government is also working on ways to leverage the India Stack and UPI. Work is also on to partner with the fintech community and devise solutions to deliver financial services for bringing the much desired financial inclusion.
Digital payments is at the core of this. A Startup and API registry is also being prepared under the new fintech policy announced by the state. About 60 fintech companies have already registered. The plan is to prepare the ground for an ecosystem for banks, government, fintech companies to work together in the area of ‘maximum digitisation’ and digital payments is a significant part of this effort. “Our effort is to make Mumbai as the fintech capital of the world,” says Srinivas. Maharashtra is also taking help of the incubators and accelerators in the state to form cohorts. The end result is to make the budding startups kick start their business operations swiftly. The government has also appointed Sunita Nanda as the Chief Fintech Officer, recently.
Andhra Pradesh’s E-Pragati to have an integrated payment system
E-Pragati is a platform over which all the information about the government departments will be hosted and any new addition will be added onto the same in an integrated manner. The payments will also be hosted on a common architecture, so no two departments have to sign separately for payments with banks or any other payment companies.
“E-Pragati will soon signup with Paytm and the APIs will be available for the government to use. We intend to integrate all the payment gateways/platforms available in India. BHIM, UPI, Paytm, Master, Visa, Rupay and Tez are already in place for integrating in various applications and services desired by line departments. We are actively engaged with other service providers to onboard their APIs for integration on e-Pragati Core Platform,” says Srikanth Akula, IT Architect, Director, ePragati Authority. As most of the modules are already available, the pace of development of any new feature is seven times faster than otherwise.
The Government of Andhra Pradesh and Mastercard have also introduced e-Rythu (e-farmer in Telugu), a mobile platform that digitizes agriculture marketplaces, payments, workflows, and provides farmers an easy and secure way to buy, sell and receive payments for agricultural products via their feature phones. It will help small-scale farmers looking to sell their produce to connect with the right buyers more efficiently in local language and receive the best possible prices. The platform has been developed by Mastercard Labs.
e-Rythu will bring change to the lives of over one million small and medium farmers in Andhra Pradesh by allowing them direct access to markets on the platform, discover the best price of their crops and receive digital payments for what they sell. The platform also creates a digital transaction history, which allows farmers to receive formal credit from banks and other financial institutions.
Telangana’s unique cash out feature
The state of Telangana has also launched a unique initiative in the area of digital payments. “One big differentiator for Telangana is the formation of an indigenously built digital payment instrument, viz. T-Wallet. RBI has recently endorsed this instrument to use for Cash-out too. This is not even possible in a Paytm or a Mobikwik,” says Jayesh Ranjan, Secretary IT, Telangana. Cash-out enables to encash the money from the T-Wallet, out of the ATM (only with Mee-Seva operators). A pilot is currently being run in five districts, which will run for three months. For example, a citizen having T-Wallet can withdraw from the Mee-Seva operator, equivalent amount of money as it exists in his T-Wallet balance.
The idea is to come up with a versatile digital payment instrument. This concept runs in the following scenarios: no phone, desktop, smartphone, feature phone, etc. It’s a bi-directional instrument, which can receive and make payments.
Odisha’s roadmap for digital payment
Odisha has been emerging as a state focusing on digitisation. Bhubaneswar, the capital of Odisha, leads the Government of India’s Smart Cities list and an estimated amount of `10,000 crore will be invested over five years. Bhubaneswar was also recognised as the second runner-up at World Smart City Awards 2016, held in Barcelona, Spain.
A road map on promotion of digital payment in the state, under the guidance and supervision of Finance and E&IT Department shall be prepared. Odisha online will be referred as the portal to pay online with its interface and backend integration of the host application. Agreement with NPCI and E&IT Department will be held to onboard NPCI in Odisha online, to provide other financial tools like BHIM, AePS, BhartBill pay, etc., where citizens can pay for other utility bills like of gas, DTH, mobile, etc.
Digital payments get a strong grounding in Assam
Assam is currently working on digital service delivery of the G2C services. “In the districts, we have started providing services on the digital mode. This was kicked off five years back, but it has become very effective in the last two years. There are about 3000 CSCs providing digital services, and run by licensed village level entrepreneurs. The payments are done through PoS machines. The entrepreneur logs-in to the e-district application, delivers the service and charges a fee to the citizen,” says Vinod Seshan, IT Secretary, Assam. The banks are also participating in disbursing the subsidies and other benefits to the citizens, using digital mediums like RTGS and NEFT. No cash. Cheque payments have also been discontinued since the last two years.
The revenues of the Assam Power Distribution Company (APDCL) has increased significantly after moving to the digital payment system. Hitherto, the payments for scholarships, incubation centers, etc., was done through cheques. This has been discontinued and replaced by digital modes via DBT.
In the food sector too, the payments to the Food Corporation of India is done digitally; citizen payments at fair price shops have also increased significantly through PoS machines. Although, the state is facing a shortage of PoS machines. The payments made to thousands of schools for the mid-day meal scheme has become 100 per cent digital and so is the payouts to the ASHA workers under the National Rural Health Mission (NRHM).