by All the financial transactions which are to be done electronically are known as E-payments, without using or involving any cash and cheque in physical. It is an online based payment system, done through the internet. In the E-payment system a person can make transactions (make payments, transfer of funds, booking anything online,etc) to another person or business without involving any physical cash, without minding the time, location and the amount of money. With this kind of advancement of technology and growing internet’s popularity, buying and selling goods & services online have been increasing exceedingly, over the past few years, resulting in the need for a robustE-payment system.
Around 70 per cent of the Indian population live in rural areas, and they contribute a keyproportion in the growth of the country’s GDP. People living in remote areas and villages lack in the technological skills which are most necessary when it comes to the e-payment system. The Government of India should encourage the concept of ‘Smart Villages’ along with ‘smart cities’. With the advancement in services of the banking sector various easy methods of payment have been developed like RTGS, NEFT, Mobile Banking and Internet Banking but in rural areas the majority of people are unaware of this system.
Rural Literacy
India, a country of 139 crore people in it, where only 35% of people lives in the urban areas, which contributes about roughly 63% of GDP, while the remaining population live in rural areas, that are 65% of total population, who contribute only 27% to the GDP. With the majority of 65% in the rural areas, they are underdeveloped with no modern education of the age, still too far from the digitalization. There is a huge potential lying there, which can lead India to its vision of a $5 trillion economy in recent upcoming years. The Indian government started many initiatives intended to fill this “digital literacy gap” and make India a digital empowering society.
Cost of Upgrade
On the very day when demonetization happened, banning of 500 and 1000 rupees did give a huge setback to the economy. Urban area people are educated and lean toward the idea of a digital economy using digital payment, as they have the means for it, like smartphones, computers, and technology & have the education to understand it and do it properly. On the other hand, in rural areas there is nothing like that, literacy rate is low, 50% of people don’t have their own phone, not even smartphone, those who have the phone, out of them most of them have keypad 2g phones.
Banking Structure
Banks play an important role in the digitalization transition. After 8 November 2016, over 2 crore accounts were opened in a month throughout the country. The Finance Minister has asked once again to all the banks for opening these no-frill accounts to ensure that unorganized sector workers, including daily wage earners, have access to formal banking channels, a step that will help the government’s agenda towards the digital economy.
