India Embraces Digital Payments Over Cash, Even for a 10-Cent Chai (original) (raw)

Business|Where Digital Payments, Even for a 10-Cent Chai, Are Colossal in Scale

https://www.nytimes.com/2023/03/01/business/india-digital-payments-upi.html

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Where Digital Payments, Even for a 10-Cent Chai, Are Colossal in Scale

India’s homegrown instant payment system has remade commerce and pulled millions into the formal economy.

A QR code at a roadside food stall in Mumbai, India, allows customers to make instant payments with their phones.Credit...Atul Loke for The New York Times

March 1, 2023

The little QR code is ubiquitous across India’s vastness.

You find it pasted on a tree next to a roadside barber, propped on the pile of embroidery sold by female weavers, sticking out of a mound of freshly roasted peanuts on a snack cart. A beachside performer in Mumbai places it on his donations can before beginning his robot act; a Delhi beggar flashes it through your car’s window when you plead that you have no cash.

The codes connect hundreds of millions of people in an instant payment system that has revolutionized Indian commerce. Billions of mobile app transactions — a volume dwarfing anything in the West — course each month through a homegrown digital network that has made business easier and brought large numbers of Indians into the formal economy.

The scan-and-pay system is one pillar of what the country’s prime minister, Narendra Modi, has championed as “digital public infrastructure,” with a foundation laid by the government. It has made daily life more convenient, expanded banking services like credit and savings to millions more Indians, and extended the reach of government programs and tax collection.

With this network, India has shown on a previously unseen scale how rapid technological innovation can have a leapfrog effect for developing nations, spurring economic growth even as physical infrastructure lags. It is a public-private model that India wants to export as it fashions itself as an incubator of ideas that can lift up the world’s poorer nations.

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A street performer with a code for donations.Credit...Atul Loke for The New York Times

“Our digital payments ecosystem has been developed as a free public good,” Mr. Modi said on Friday to finance ministers from the Group of 20, which India is hosting this year. “This has radically transformed governance, financial inclusion and ease of living in India.”

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