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Guest Column: The story of digital money - past, present and future: Dewang Neralla, MD & CEO, Atom Technologies

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Guest Column: The story of digital money - past, present and future: Dewang Neralla, MD & CEO, Atom Technologies

Digital money came into India in 1980, when the Central Bank of India launched the country’s first-ever credit card. Debit cards followed a good seven years later when CitiBank launched the first card in 1987. The first point of sale (POS) system also got installed in the 1980s. But POS became popular with businesses only after the rollout of the Internet in the late 1990s.

Multiple factors contributed to the evolution of digital payment in the last two decades. The first factor involved consumers not wanting to carry cash for their purchases. The second issue that fuelled digital payment was customers being able to make deferred payments for their purchases. The third related to users feeling secure about digital payments – thanks to a series of regulatory interventions. The fourth and final factor was the emergence of a young, upwardly mobile population – indulging in e-commerce.

While digital payments were gaining popularity among the well-heeled and most of the payment methods such as POS, Internet, IVR as well as prepaid cards had been in existence for over a decade, the reality remained that the majority of the population still loved to deal with cash. The government, therefore, needed to do something drastic to wean them of the rather-expensive love affair.

Our hon’ble PM did just that when he announced on November 8 that currencies in the denomination of Rs 500 and Rs 1000 would cease to be a legal tender henceforth. It made many people aghast. Demonetisation, as this was later termed, was a big blow for the cash economy as merchants, who were accepting only cash, feared losing all their business.

Policy makers immediately swung into action and announced a slew of measures that would provide succour to the disadvantaged. Removal of debit card fees and promotion of e-Wallets were among the many measures. As the merchant population clamoured for more and more POS terminals, the government announced an ambitious plan of setting up over a million POS terminals in a space of three months.

In the last few weeks, we have seen multiple banks launching Unified Payment Interface (UPI) based payments and our PM launching the BHIM app and Aadhar Pay. This, indeed, has been one of the most defining and transformative periods in India’s recent history.

So what does the future have in store for us?

Aadhar, in our opinion, has the potential to change things dramatically across the entire economy. It could serve perfectly well for payments as well regular bank account transactions.

Innovations such as Aadhar and UPI will be driving digital payment in India. In fact, we feel that the latter has the potential to become a game changer with the introduction of new paradigm called VPA. In the world that we live in, all one needs to pay is a mobile phone and the virtual address of the customer.

The future may also see the resurgence of old technologies. We have already seen this in the case of QR codes. QR offers a very interesting proposition for the customer as well as the merchant. Interoperable QR Code (or India QR code, as it is called now) would allow a merchant to accept payments by allowing payment providers to just stick a QR code that identifies the merchants. Customers can make payments scanning these QR codes using bank or service providers’ apps that would allow mVisa, Master Pass or mRupay virtual cards issued through these apps.

Engineers are working on innovations all over the world. Apparently, work is happening on sound-based payments called NSDT; some others are working on chat bot-based payment systems. The scope for innovation is truly limitless.

Going forward, we expect telecom networks to play a big role in determining how India pays. In the West, Internet speeds are a given, but in India, we are still grappling with basic network speeds. Can a 4K fingerprint data (Aadhar) be verified within five seconds – similar to a normal card transaction with a PIN? For a new-age economy to prosper, we definitely need a telecom infrastructure that supports good Internet speed. Here’s wishing Godspeed to the telecom networks.

(The author is Managing Director and CEO, Atom Technologies)

Disclaimer: The views expressed here are solely those of the author and do not in any way represent the views of


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