Financial Inclusion: News and Views on Digital Payments, Aadhaar and Data


Over the last month, there have been positive moves on digital payments and long pending legal issues on data protection and privacy.

With Fino Payments Bank beginning operations in July, there are four payments banks now in the country. Going forward, it will be interesting to watch the interplay of competitive forces with the main banks as well, especially on transaction charges for low value digital payments. State Bank of India, the largest bank in the country, reduced charges for some transactions,to rates lower than three of the four new payments banks - see Financial Express, 27th July 2017 for details.With Google, Facebook, WhatsApp etc. looking to integrate UPI payments within their systems (Indian Express, 10th July 2017), the payments landscape is set to change dramatically.

It’s been two years since the Supreme Court’s interim order on Aadhaar referred the issue of right to privacy to a Constitution Bench. Finally, last month a nine-judge Constitution Bench, headed by the Chief Justice of India, heard arguments over three weeks on whether privacy is a fundamental right or not. The Court has reserved its judgement and has not set a date for the verdict (Mint, 3rd August 2017). Once the judgement comes through, the other pending issues related to Aadhaar will be heard by a smaller bench.

Meanwhile, Aadhaar continues to be used to simplify the payments process, as shown by the experiences of the CGAP team in the village of Royyuru, Andhra Pradesh, (CGAP, 27th July 2017). The Aadhaar-enabled Payments (AePS) in the fair price shops and IDFC Bank’s mini-ATMs and Aadhaar Pay app at merchantsgive customers a seamless digital payments experience and enable more efficiency in government benefits disbursal. However, for scaling these processes up at national level, certain challenges do remain – monitoring and addressing authentication failures, fixing transparent transaction charges that work for merchants and customers, ensuring 24X7 connectivity etc.

Finally, the government has moved on the data protection front (Economic Times, 2nd August 2017). The Ministry of Electronics and Information Technology set up a ten member committee to study and identify key data protection issues and recommend methods for addressing them; a draft Data Protection Bill has been included as part of the terms of reference for the committee.


• The latest policy brief from Indicus Centre for Financial Inclusion gives an update of the Direct Benefits Transfer programme in India and calls for more focus on implementation challenges at the ground.
Dr Viral Acharya made a case for a Public Credit Registry in India on July 4, 2017 at the 11th Statistics Day Conference; a high-level Task Force will set up to examine the details.
The progress of the Pradhan Mantri Jan Dhan Yojana continues to be released on a weekly basis, unfortunately, data on Aadhaar seeding and Zero Balance Accounts have been discontinued.


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Can User-Friendly Payment Methods Improve Repayment Rates?
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Is ‘Cashless’ the Road Ahead towards Digital India?, MicroSave and NPCI, 8 August 2017
Survey and Segmentation, Smallholder Households in Côte d’Ivoire,CGAP, 24 July 2017
Crowdfunding in China: The Financial Inclusion Dimension, CGAP, 21 July 2017
Social Norms Change for Women’s Financial Inclusion, CGAP, 21 July 2017
2016 Annual Report: Financial Inclusion in India, Financial Inclusion Insights, June 2017 The Indicus Centre for Financial Inclusion was launched in 2011 to distil and disseminate information on accelerating the poor’s access to high-quality financial services. ©Indicus Centre for Financial Inclusion. All rights reserved. 8thAugust 2017

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