Indian state launches digital payments service

By on 28/08/2020 | Updated on 24/09/2020
Andhra Pradesh residents will soon be able to receive state payments by using their mobile phones to scan QR codes. (Photo courtesy Max Pixel).

A regional government in India has launched an initiative to promote digital payments and drive financial inclusion in rural areas.

The Andhra Pradesh government is working to enable and encourage citizens to make and receive cashless state payments using QR (‘Quick Response’) codes: squares of black and white blocks that are scanned by smartphones. Citizens seeking to take advantage of the scheme – for example, to receive a benefits payment – require a government official to generate a QR code on their computer screen. The citizen then uses his or her mobile phone to scan the QR code in a number of approved applications to authenticate and instantly receive the payment.

The scheme is being developed with Canara Bank, one of India’s largest public sector banks, and the National Payments Corporation of India (NPCI), an umbrella organisation for retail payments. It will see the introduction of the UPI (Unified Payments Interface) QR code in more than 15,000 ‘villages and wards’, and was launched by the chief minister YS Jaganmohan Reddy last week. It will be used by 35 Andhra Pradesh government departments and in the provision of more than 500 services, according to a short film accompanying the launch.

“I am confident that UPI will enable numerous villagers to perform convenient and hassle-free cashless transactions,” said Jaganmohan Reddy, adding that the aim is to launch digital payments in further localities within the region.

‘Garnering momentum during the pandemic’

UPI, which is the Mumbai-headquartered NPCI’s flagship product, has gained momentum during the coronavirus pandemic, NPCI said as it announced details of its involvement in the Andhra Pradesh initiative. UPI has been “the beacon of hope to promote financial inclusivity in the country and has garnered tremendous momentum, especially during the pandemic”, NPCI managing director and chief executive Dilip Asbe said.

“This first-of-its-kind initiative will not only reduce the time spent by villagers waiting in serpentine queues but also ensure secure, instant and contactless payments especially amid COVID-19 outbreak,” the government said, according to an Economic Times report. India is reported to have suffered more than 50,000 deaths due to COVID-19, with the death toll in Andhra Pradesh reported this week as being more than 3,500.

Authorities in India, led by Prime Minister Narendra Modi since 2014, have been striving to bring more of its vast population of more than 1.3 billion into the banking system. In 2015 the government launched its ‘Digital India’ campaign, which involves improvements to digital infrastructure, digital literary and delivering services digitally.

But challenges remain. More than 2,000 villages in Andhra Pradesh struggle with basic mobile connectivity, according a media report earlier this year.

The Andhra Pradesh government is also using QR codes as part of its public health response to coronavirus. Citizens are able to check the availability of beds in the 138 hospitals across the state by scanning a QR code, according to a report earlier this month.

QR codes are being increasingly encouraged by governments worldwide to enable cashless payment. Global Government Forum reported last year how Ghana had committed to rolling out a universal QR code, as the West African country’s government looked to accelerate the take-up of e-payments.

About Ian Hall

Ian is editor of Global Government Fintech a sister publication to Global Government Forum. Ian also writes for media including City AM and #DisruptionBanking. He is former UK director for the pan-European media network Euractiv (2011-2018), editor of Public Affairs News (2007-2011) and news editor of PR Week (2000-2007). He was shortlisted for ‘Editor of the Year’ at the British Society of Magazine Editors (BSME) Awards in 2010. He began his career in Bulgaria at English-language weekly the Sofia Echo. Ian has an MA in Urban and Regional Change in Europe and a BA in Economics, both from Durham University.

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