LIRNEasia is a regional ICT policy and regulation think tank active across the Asia Pacific

Financial infrastructure is a necessary condition for the digital economy

Back in 2002-03 when we were designing the e Sri Lanka initiative, we worried a lot about a ubiquitous mechanism that could enable small online payments. I was hearing more or less the same concerns about the lack of a good payments infrastructure at a digital strategy meeting last week. It appears the India government has solved the problem:

WATCHING money drain from your bank account has never been so much fun. On WhatsApp, a messaging service ubiquitous in India, sending rupees is now as easy as posting a selfie. Set-up is a breeze, because all Indian banks have been corralled onto a common payment platform on which anyone, from Google and Samsung to local payment firms and banks themselves, can build their own user interface. Money zips instantly from one bank account to the other, without any need to set up a pesky digital wallet or download some new app. At least outside China, there is no simpler way to shift money today.

WhatsApp’s offering is being rolled out gradually. The number of transactions routed through the United Payments Interface (UPI), the system on which WhatsApp and the rest are riding, has soared from almost nothing in early 2017 to over 150m a month in January. On current trends, UPI transfers will overtake cash withdrawals from banks within weeks. Some 665bn rupees ($10.2bn) will have shifted hands—or phones—in the year to March.


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