Notes from the Field 1 – How ready is India to go digital?

  • 14 May 2017


“ऐ साहेब ई मोदी जी वाला बात ह ठीक बा लेकिन इहा त ढेर लोगन के मोबाइल से नंबरे मिलावे न आवेला |”

(Oh sir, this Modi ji’s approach is all very well but many
 people here don’t even know how to dial a number on a mobile phone)
There is a push for digitising payments across the board in India. This has picked up steam since demonetisation in November 2016. But, how ready and willing are Indians to adopt digital payments? This question needs more thought as there continue to be issues related to mobile phone penetration, bank account features, acceptance of digital payments across value chains and viability (for users) related to small transactions.

It will take a substantial effort at digital literacy to universalise the digitisation of transactions.  We realised this recently (March-April 2017) when as part of an M-CRIL team, we were designing and delivering training programmes on digital payments in Bihar (north India). We were covering artisan clusters where people practise a certain art or craft that is specific to an area (for example, Sea Shell Craft, Rag Dolls, Wooden Toys, Madhubani PaintingsSikki Grass Craft and Sujini Embroidery). Our trainings covered over 1,000 artisans, mostly from low income segments, nearly half were women.

This is what the artisans told us:

“My business turnover is small. Phones cost money as does running them,” – 45% did not own a phone. The rest mostly owned and used old-style feature phones.

“Our account features (no-frills account) do not allow for a debit card” – To be able to use the most basic form of digital payment, USSD (banking transactions using a feature phone and no internet), you need to have a debit card in addition to a phone – only 15% of artisans covered in our program reported having a debit card!

”You are explaining this to me, but who is going to convince my supplier?” Digital payments are no good for artisans when others in their value chain (suppliers and traders) will not accept this form of payment. We managed to include suppliers and traders in some of our trainings, but clearly more targeted trainings are needed.

“My turnover is Rs20,000 per month and after all expenses, I get about Rs5,000 to Rs6,000 per month in hand. Why should I use digital payments for such small amounts?” We need to be able to present use cases for digital payments that are tailor made for our target group.

“What if I press a wrong button? Will it wipe off all the money in my account?” There were some who seemed to be too scared to adopt digital payments for fear of making mistakes while doing a digital transaction 

While it is important to push for digital payments and educating people in using these, it is not as simple as walking into a village and telling the community why they should go digital. We need a lot more thought and a nuanced approach to promoting digital finance.