From Wallets and UPI to Blockchain, How Digital Payments are Evolving in India

From Wallets and UPI to Blockchain, How Digital Payments are Evolving in India

HIGHLIGHTS

  • The government has played a key role in the digitisation of cash in India
  • Digital payments went down in February but are rising again
  • Upcoming payments firms will have to expand reach via new channels

Most accounts of successful digitisation feature technology providers or tech-hungry consumers in the lead role. But in the story of digital payments in India, it is the government that is the unlikely hero.

In his budget speech this year, Finance Minister Arun Jaitley set the nation a target of 25 billion digital transactions for 2017-18. And enabling this, we have the creation of a new category of financial institutions, namely the Payments Banks. Telecom/ e-commerce companies have turned into payments banks, and are processing huge numbers of low-value transactions via digital wallets and other electronic prepaid instruments for their subscribers and customers, many of whom never had the benefit of formal financial services.

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In August 2014, India’s financial inclusion agenda got a huge boost with the launch of the “Pradhan Mantri Jan Dhan Yojana”, devised to provide every Indian easy access to basic banking services. In just over two and a half years, the Jan Dhan Yojana has garnered a record breaking 282.3 million “no-frills” bank accounts and deposits worth Rs. 640 billion. From here, the next step is to enable these accounts to make and receive digital payments. Aadhaar, India’s unique identification program, is the perfect platform for that because it links to bank accounts to enable both Direct Benefit Transfer (of government payouts) and a host of simple financial transactions via the Aadhaar Enabled Payment System.

aadhaar card reuters 548

Another government initiative that ended up promoting digital payments, even though that was not its primary intent, was the overnight demonetisation of Rs. 500 and Rs. 1,000 currency notes in November 2016. With about 86 percent of cash instantly going out of circulation, consumers from all segments, and even tiny, unorganised businesses were forced into digital transactions, shooting that number from 672 million in November 2016, to 958 million just a month later. Even after the new notes flowed into the system and digital transactions dipped considerably, they remained at higher than pre-demonetisation levels at 763 million in February 2017, and were at 844.7 million in June 2017, as per the RBI.

But arguably, the government’s crowning achievement is the Unified Payments Interface, which has transformed the fragmented mobile payments landscape with an environment where money can move from any bank or financial provider to any other, instantly, cheaply, securely and transparently.

The path ahead
Although the average Indian consumer is way more financially empowered today than a few years ago, as a nation, India still has a long way to go. Getting the one billion plus largely feature phone subscribers to use their device for simple financial transactions is one thing, educating them into financially responsible, informed consumers, quite another. Although India’s payments infrastructure is looking solid, there is a need for a massive effort to build awareness about basic financial management as well as safe financial practices to protect customers from fraud. The fact that India is deemed a favourite target for cyber-attack underlines the seriousness of the problem.

Viability is a big challenge for India’s niche digital payment providers, who are pouring large sums of money into acquiring customers and keeping them happy. At present, almost all digital payment services are being offered free of cost or with attractive incentives – for instance Paytm Payments Bankcharges no fees on any online transaction, while Airtel Payments Bank offers free talktime. Once the honeymoon is over, providers will certainly look at charging these services, which might put the brakes on growth.

payent1

One way to keep costs (and hence fees and charges) down is to leverage Blockchain and other open source technologies to facilitate digital payment transactions. Actually, Blockchain fells several challenges in one go – it collapses transaction time and cost, improves transparency, and provides virtually impenetrable security. It can also scale up to meet India’s requirements with ease.

The last point is crucial because it is also the key to viability. Niche payment providers will need to extend their services down to the very last mile and feature phone to sustain the business; banks, although under less pressure, should also look at expanding reach via mobile and other channels, such as micro ATMs and business correspondent agents carrying handheld devices for delivering digital payments to the doorstep.

[“Source-gadgets.ndtv”]

Insights from statistical analysis of great (and not-great) literature

Ben Blatt’s Nabokov’s Favorite Word Is Mauve: What the Numbers Reveal About the Classics, Bestsellers, and Our Own Writing takes advantage of the fact that so much literature has been digitized, allowing him to run statistical analyses on writers, old and new, and make both fun and meaningful inferences about the empirical nature of writing.

Blatt’s book covers everything from James Joyce’s use of exclamation points (1,105 !’s per 100,000 words) to the most distinctive words appearing in erotica whose authors hail from New York City (“subway, popsicle, senator, butthole, museum, landlord, thrusted, Jacuzzi, sin, and shrugs”).

Dan Piepenbring’s review of Mauve highlights the implicit social insights that can be gleaned from this sort of analysis (“Male authors are far likelier to write ‘she interrupted’ than ‘he interrupted'”), and also the way that the book made him feel about his writing.

“The written word and the world of numbers should not be kept apart,” Blatt writes, and I think he’s right; what’s frustrating is that no one has yet figured out how they might productively collaborate. Like last year’s “The Bestseller Code,” which described an algorithm that predicted the plots of popular novels, “Mauve” wagers that the “digital humanities,” as they’ve uneasily come to be known, can instruct audiences outside of the academy. The book’s finest moments prove that they can—but to what end? Blatt argues that his work is “not an attempt to ‘engineer’ art as much as a way to understand it”: “If you were a band in the 1960s you would want to know how the Beatles were recording their songs.” Maybe so, but is that really what this book professes to teach? Knowing the rate at which Ringo hits his snare drum does not a Beatle make.

Reading “Mauve,” I began to imagine two duelling schools of authorship, both motivated by statistics. In one, writers would cultivate their tics, inhabiting themselves so thoroughly that to encounter them on the page would be like finding their footprints in wet cement. In the other, writers would aspire to defy the data, styling their prose with such intricate, chameleonic grace that no statistician could betray their identity. A few decades ago, the advent of the word processor made it easier than ever to revise on the fly; it also made it easy to dwell on one sentence ad infinitum, gilding the lily where once one would’ve advanced to the next thought. The glut of data is another mixed blessing—past a certain point, writers would do better in a state of blissful ignorance. Otherwise, they might end up with work like my ninth-grade term papers, mannered and overwrought.

Nabokov’s Favorite Word Is Mauve: What the Numbers Reveal About the Classics, Bestsellers, and Our Own Writing [Ben Blatt/Simon & Schuster]

The Heretical Things Statistics Tell Us About Fiction [Dan Piepenbring/New Yorker]

[“Source-boingboing”]

Money ‘taken from Cambodian child’ in casting game for Angelina Jolie movie

‘Srey Moch [above, with Jolie] was the only child that stared at the money for a very, very long time,’ the US star, who directed First They Killed My Father, told Vanity Fair. Photograph: Roland Neveu/Netflix

A casting technique used in Angelina Jolie’s new film involved giving money to, then taking it away from an impoverished Cambodian child – who was awarded the part when she became “overwhelmed with emotion”.

Jolie, who is a goodwill ambassador for the UN Refugee Agency (UNHCR), recounted the method in an interview with Vanity Fair. Her made-for-Netflix film First They Killed My Father, tells the story of life under the regime of Cambodian dictator Pol Pot. According to the article, Jolie looked in “orphanages, circuses and slum schools” for children “who had experienced hardship” to audition for the role of Loung Ung, from whose memoir the film is adapted.

Evgenia Peretz, the article’s author, wrote that the casting directors then “set up a game, disturbing in its realism: they put money on the table and asked the child to think of something she needed the money for, and then [for the child] to snatch it away. The director would pretend to catch the child, and the child would have to come up with a lie.”

“Srey Moch [the girl ultimately chosen for the part] was the only child that stared at the money for a very, very long time,” Jolie told Peretz. “When she was forced to give it back, she became overwhelmed with emotion. All these different things came flooding back.”

“When she was asked later what the money was for, she said her grandfather had died, and they didn’t have enough money for a nice funeral,” Jolie added.

In the interview Jolie also revealed that she was diagnosed last year with Bell’s palsy, which causes temporary paralysis of the facial muscles. Jolie credits acupuncture for helping her to recover from the condition, which had caused one side of her face to droop. “Sometimes women in families put themselves last, until it manifests itself in their own health,” she said of the illness.

Jolie also discussed the surgery she underwent after learning that she had a gene mutation that increases her risk of developing breast and ovarian cancer. In 2013 the actor underwent a double mastectomy and reconstructive surgery and later wrote about the experience for the New York Times. She has since had her ovaries removed, a decision she says she made after blood tests indicated she might have cancer. When Jolie learnt that she didn’t have cancer, she says, “I dropped to my knees. I went into the actual [ovarian] surgery happy as they come. I was skipping. Because at that point it was just preventative,” she said.

First They Killed My Father will be shown at the Toronto international film festival, and is expected to be released later this year.

[“Source-theguardian”]

US markets lower after tech reversal from record highs

Businessman sleeping with bear with down trend graph

US markets closed lower on Thursday after technology sector rolled over.

The Nasdaq composite closed 0.6% lower at 2,475.42 and fell more than 1% earlier in the session. The S&P 500 also closed lower at 6,382.19, slipping 0.1% as tech stocks dropped 0.8 % to lead decliners.

The tech sector had notched an intraday record earlier in the session, along with the Nasdaq and the S&P.

Tech faced pressure as investors took profits off the table following strong earnings from companies in the space.

The Dow Jones Industrial Average, outperformed, closing 85.54 points higher at 21,796.55 level and notching intraday and closing records.

Meanwhile, initial jobless claims came in at 244,000, slightly above the expected 240,000. Durable goods orders, meanwhile, rose 6.5% in June.

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[“Source-indiainfoline”]