Digital Public Infrastructure: Power and Potential of Fintech in India

The Indian Fintech industry is expanding rapidly, fueled by investments in digital infrastructure such as the India Stack and JAM Trinity. These innovations are driving growth across payments, digital lending, Insurtech, and Wealthtech. 

The Building Blocks of India’s Fintech 

India Stack is a pathbreaking digital public infrastructure. This open-source API suite promotes startup growth by allowing new applications to be built on a secure, standardized platform. It is further strengthened by the JAM vision, a trio of initiatives ensuring accessibility and identity for all: 

• Jan Dhan or the Pradhan Mantri Jan Dhan Yojana (PMJDY), is India’s flagship financial inclusion program. Launched in 2014, it aims to provide financial services to all citizens, especially in low-income and rural areas. 

“Over 500 million bank accounts that is 50 crore Jan Dhan bank accounts have been opened in India”  

RBI Governor Shri Shaktikanta Das at GFF 2023 

• Aadhaar, the world's largest biometric identification system allows Fintech organizations to deliver paperless and contactless financial services, significantly enhancing transaction security and reducing the risk of identity fraud. 

“As on 30th November 2022, the Unique Identification Authority of India had issued 1.3 billion Aadhaar identities.” 

RBI Governor Shri Shaktikanta Das at GFF 2023 

• Extensive mobile connectivity is the final piece of the puzzle. As RBI Governor Shri Shaktikanta Das points out, the number of internet users through mobile phones grew from a mere 70 million in 2014 to a staggering 800 million in 2022. This indicates that digital finance is readily available for people through smartphones. 

The Impact and Benefits of UPI

The Unified Payments Interface (UPI) is a digital infrastructure for instant interbank transactions via any e-payment mobile application. Accessible via smartphones, UPI standardizes transactions, ensuring interoperability between banks and PSPs (Payment Service Providers).   

• UPI has boosted digital payments, processing billions of transactions every month and advancing the vision of a cashless economy across India. 
• UPI's open architecture has spurred the rise of Fintech startups, driving innovation in mobile wallets, peer-to-peer (P2P) payments, and merchant transactions. 
• UPI has simplified e-payments and boosted financial inclusion among the unbanked and underbanked. 

“The success of UPI is evident in the sheer numbers – over 10 billion transactions were carried out in August 2023 alone, with a value exceeding ₹15 trillion.” 

RBI Governor Shri Shaktikanta Das at GFF 2023 

The Way Forward 

India's Fintech revolution is in full swing. By embracing digital tools and fostering inclusivity, India is paving the way for a more equitable future.