PM Narendra Modi has roped in UIDAI chairman and Infosys co-founder Nandan Nilekani for help in handling the transition from a hard cash society to a cashless one, to ease the woes of demonetisation. According to a Bloomberg report, Nilekani, a high-profile Congress member, has joined a panel to chart out a path to digital payments.
The 13-member committee headed by Andhra Pradesh chief minister Chandrababu Naidu met for the first time last week, after which in an interview, Nilekani said, “India has the underlying digital financial architecture in place to get this going”.
Nilekani, along with the other panel members, is working out ways to get more Indians to adopt digital mode of payments, by making use of their own smartphones and increasing the availability and use point-of-sale machines in local villages.
The committee is currently focusing on two key aspects: getting more merchants to accept the United Payments Interface that has already been rolled out by major banks earlier this year in April, and procuring more point-of-sale devices.
The interface makes transferring money as easy as sending a text message. According to Nilekani, boosting acceptance of this payments interface is achievable in weeks. However, getting the estimated one million new POS devices will take much longer, because of the need of a tender to purchase them. Nilekani, who lost the 2014 elections to a key member in PM Modi’s cabinet, said that breaking down the problem into digestible chunks is the first step to solving it.
The committee is likely to meet again this week to look at how to approach those with limited access to technology. While suggesting that each category of phone users should have a different strategy, Nilekani said that while India has 250 million smartphone users, there are about 350 million who only have feature phones while another 350 million don’t have a phone at all.
The real challenge is the 350 million people without phones, many of whom are poor. The plan is to attract all those enrolled in Aadhaar, and enlist the remaining, toward micro ATMs promoted by large Indian lenders which already have a presence in 1,30,000 village retail outlets or kirana stores. “There is a sense of urgency,” said Nilekani.