ABSTRACT

India is a vast country with 63 percent rural population. Any project of economic development will not be successful if villages are not been part of it. In the era of science and knowledge, the information technology has played crucial role in the process of development and touched every aspect of life. The banking and finance sector are using technology exactingly service delivery. The demonetization drive launched by govt of India on 8 Sep 2016 push the country to use alternative method of payment. The situation arises with Covid-19 aggravated the problem and urge the use of electronic method to financial transactions. Eventually, India’s path of cashless economy became compelling and digitalization drive became prime focus of governmental policy. Lack of infrastructure, digital illiteracy, doubt and mistrust, unwillingness etc. have been the conventional hurdle in way of digitalization of payment system in rural area. But a number of exclusive initiatives have made the way easier. The accessibility and utilisation of different digital payment system such as Aadhar pay, Paytm, IMPS, UPI, Bank PoS machines etc. in rural area had increased the number and value of digital payment over time. Many government schemes which are being operated in online mode had added demand for use of digital mode of transaction in rural area. As a result, total retail digital payment which was 5455 lakhs in December 2015 increased with a combined annual growth rate (CAGR) of 56% to 32509 lakhs in December 2019 and value of these transactions increased from Rs 928 thousand crores to Rs 2682 thousand crores, recording a CAGR of 30% during the same period. Consistent increase in use of digital mode in retail payments along with the profound revamping of cash payment system, indicates increasing acceptance digital payments vis-à-vis cash payment methods. Comparing the use and growth of digital payment in rural area with that of urban area impulses the need of special attention to remove bottlenecks in wider acquiescence of the digital payments in rural area. Setting up Payments Infrastructure Development Fund (PIDF) by RBI is example of good step in right direction. Government of India’s initiatives like Digital Finance for Rural India: Creating Awareness and Access through Common Service Centres (CSCs), Bharat Net Programme will be able to transform rural India as active leader of cashless economy.

Key Worlds: Digital Payment, Cashless Economy, Aadhar Pay, Paytm, Demonetization\