India is progressing fast to become a digital payments economy and physical banks may go extinct within the next six years, Amitabh Kant, CEO at Niti Aayog said at an Internet and Mobile Association of India (IAMAI) event on the FinTech industry. “You will see the death of physical banks, because the costs will be so enormous”, Mr. Kant remarked, adding that “using smartphones, each one of us will be a walking ATM by 2020, helping people around us, who do not own a smartphone, move cash in and out of digital economy.”
“All eKYC will be made Aadhar-based soon; and the spread of physical infrastructure in the next two years will be a game changer for the industry,” he said.
He added that BHIM app had signed up about 8 million merchants within the first 20 days of its launch. The worldwide fintech market is around 32 billion dollars and is likely to be around 45 billion dollars by 2020. “This year Internet will be made accessible to 150 thousand panchayats and to another 150 thousand panchayats in 2018,” he said. Internet Hotspots for tourists are also in the pipeline.
Speaking at the event, Dr Saurabh Garg, Joint Secretary, Department of Economic Affairs, Ministry of Finance said, “Fintech as a tool for financial inclusion is the goal. The vision is that each individual, irrespective of the phone they use- smartphone or a feature phone- should be able to make digital payments. In simple words, when people stop carrying wallets.”
Mr. Mrityunjay Mohapatra, deputy MD & CIO at State Bank of India and Chairman of the fintech committee of IAMAI said, “The Aadhar design principle is based on micro-services and in this case we have a first mover advantage over other countries. There are hardly any countries in the world which have a stack like India stack. If we can develop an ecosystem around APIs of identification, it will be of great potential.”
More imminent speakers at the event highlighted how India has adopted digital payments at a very fast pace. Data costs in the country have reduced by 50% in the last 12 months thereby paving way for digital transactions. As a result, monthly digital payments have increased from 15 million dollars in November 2016, to $359 million in March 2017, showing a 24X increase.
Speakers at the event included several fintech industry stalwarts, Yashish Dahiya, CEO of Policy Bazaar; Adhil Shetty, CEO at BankBazaar; Naveen Surya, MD of ItzCash and Mr. Raj Chowdhury, head of Blockchain Innovations at ICICI Bank.