Digital Financial Services on the Rise but Rural India Still Catching Up

Mastercard has been among a number of financial service providers to promote digital payments across India. Its most recent awareness campaign aimed to illustrate the benefits of cashless transactions to rural communities.

Digital Payments Easier and More Efficient

India’s second largest payment processing network, Mastercard, has been among the financial institutions consistently pushing for the adoption of digital payments among desi consumers. The company’s latest initiative, Team Cashless India, has been directed at raising awareness and engagement among users in less-populated areas around Uttar Pradesh and Assam.

Hands-on campaigns in Lucknow, Varanasi and Guwahati saw them partner automotive, food service and trade associations, as well as local volunteers in an effort to gather support for a more robust digital payments infrastructure among small business owners. Part of a worldwide campaign, Team Cashless India has stressed the commitment to channel more micro enterprises into the digital economy by 2025.

Financial educators have had the chance to get in touch with small town consumers and shopkeepers and illustrate first-hand the benefits of entering the digital economy. Many have seen how cashless payments simplify most daily tasks from bill payments to personal transfers or buying an online lottery ticket.

Mastercard has had its challenging moments over the past year, with the RBI limiting the network onboarding due to storage localization of consumer data. Still, it remains a major provider and partner of most desi banks. In the long run, the company sees its competition with locally issued RuPay and global rival Visa more as a positive influence on the market, with India moving towards digital maturity faster than most emerging markets.

On the Subcontinent, since 2019, it has obtained the support of over 130 thousand micro-enterprises after similar campaigns. Volunteers hope to get on board over 50 thousand additional merchants that have yet to go digital. Mastercard urges both end-users and businesses to nominate shopkeepers and companies that do not yet accept cashless payments.

The campaign boasts the support of the Confederation of All India Traders (CAIT) and local authorities, both among stakeholder groups that have the influence and initiative to develop further India’s digital infrastructure. Local government officials were quoted expressing their support for the initiative and the firm conviction that a cashless India benefits business efficiency, tax transparency and consumer comfort.

Uttar Pradesh has participated actively in the India Smart Cities contest, rating high with many participating towns. Most states across the Union have also shown their enthusiasm for the Digital India flagship campaign of the Central government, accelerating the safe and secure adoption of digital services, payments and connectivity for more users than before. The result is the almost 800 million online users as of 2022.The digital payments across the nation have naturally followed suit. Almost tripling between 2018 and 2021, cashless transactions stand at around 4,400 crore annually. User-friendly systems and popular banking methods have done the rest. Even where many rural users do not have a bank account, these solutions have proven compatible with mobile fintech apps, bank clearance and peer transfer methods, greatly increasing digital payments among mobile users in addition to card holders.

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