Less-cash society more achievable than cashless: E-payment leaders


While have skyrocketed in the last five years, with the pandemic providing a fillip, the aim to be a cashless society is still a far-fetched dream for India.

However, being a less- society is something that the country can achieve in the medium term, panellists at the Business Standard Insight Summit on Digital and Payment Banks concurred.

“I think all of us are aligned with the idea of less than cashless.

I just hope CBDC (central bank digital currency) does some magic so that we reach the cashless dream.

So, in 3-5 years’ time, if we have a cash-to-GDP ratio in single digits, we would be happy as an ecosystem. And, it would be a huge success to India’s digital payment journey,” said Dilip Asbe, managing director (MD) & chief executive officer (CEO), National Payments Corporation of India (NPCI).

Echoing his views, Rishi Gupta, MD & CEO, Fino Payments Bank, said, “When we talk about cashless society, we are not talking about people in Mumbai. We are talking about people who are in the hinterland.

Becoming a cashless society is a far-fetched dream for India but less is something that is more achievable. And, a lot of fintechs and banks have started to focus on the mass segment to make them join the digital bandwagon.”

There is about $1.6 trillion of personal consumption expenditure that takes place in India. Of that, currently 55–60 per cent is still cash, said Sandeep Ghosh, Group Country Manager, India & South Asia of Visa.

“So, there is a fair bit of distance to traverse and a significant amount of cash displacement opportunity that continues to be there,” he said.

“We have a long way to go and less cash should be the medium-term mantra. Cash is still growing. But I think the efforts of the government, NPCI, and all the banks are wonderful. We have seen digital grow but cash is still growing. I think we have to continue plugging away at increasing the acceptance of digital,” said Parag Rao, Country Head – payments business, consumer finance, digital banking & marketing, HDFC Bank.

Ganesh Ananthanarayanan, chief operating operator (COO), Airtel Payments Bank, said, “In the next five years, both cash and digital transactions will coexist because even today we have possibly over Rs 30 trillion cash in circulation. Five years down the line, we will possibly be the fastest growing because we have done a lot of innovation in the last five years. And, the other innovations which are there in the pipeline will help accelerate digital.”

Vishwas Patel, Chairman, Payments Council of India, said, “There is a pace at which are growing. These regulations sometimes are beneficial in the long term but in the short term they create havoc. While the government is saying we should have zero MDR on the other side, RBI is saying if you want a licence, you have to have a positive net worth. So yes, regulation is tricky and only the experienced guys will go through that.”

“Regulations on standing instructions, card control, two-factor authentication, a lot of that is important in a market. But you also need to make sure that these regulations don’t end up creating a lot of friction. This is because one of the key aspects of digital is that it’s got to be paperless, seamless, frictionless,” he added.

Commenting on the choices that the consumers have when it comes to modes of payment, Asbe said, “In my assessment, we are not even one-third when it comes to pure digital form of transactions in India.

While the penetration may be 50 per cent in value, there is a large volume of transactions that is happening on cash which is predominantly the small-ticket transactions. So, I think India is a high-volume, low-margin game as far as payments are concerned”.

When it comes to the Budget wish list for the payments sector, Asbe said, “ incentive is one ask from our side. It is very important for the ecosystem because there has to be some incentive for them to give the service, and no body can run their services for free.”


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