With just over one-third of the mammoth target achieved by the end of the first quarter of the current financial year, the common man and the Industry Experts have been rethinking about the target of 30 billion digital transactions set for the year. The government, in order to ensure that the nation progresses with the changing times, has placed renewed emphasis on making people understand the power and reach of digital transactions. However, let us not ignore the fact that the completion of the target will ultimately depend on involvement of people and their willingness to change the way they conduct their transactional lives.
This is what Dhinendra Lohmor thinks of the 30 billion digital transactions target announced by the Indian Government. Reflecting on the future of the Digital Transactions in India, he further adds that mere achievement of targets is not enough. What is more important is to change the mindset of the common man with respect to preference for certain modes of financial transactions. Encouraging and enabling smooth transition from paper-based to cashless transactions is what the Government and the Industry is striving for. Given are some excerpts from a recent interview with Dhinendra Lohmor.
Question: What makes the 30 billion digital transaction target too steep?
Dhinendra Lohmor: The target itself is not too steep; however, the planning and manner of execution is key to achieving it. I mean, one cannot give a debit or credit card to a person who lives in a rural area and shops less than 3 times in a month for basic necessities; and expect him or her to use the card every time he or she shops. We have to undertake the mammoth task of making our population understand the importance of financial technology, and the convenience it brings along and how it can upgrade the quality of life.
For example, people who visit the town every month for shopping from their village are accustomed to approaching their trusted local vendors, and deal in cash. For them, paying processing fees, understanding the PIN submission and digital aspects of the money transactions is really difficult at both the seller’s as well as the buyer’s end). Hence to achieve what we have set out to as a nation, it is important to spread awareness.
Question: What is your take on the Digital transactions’ Future in India?
Dhinendra Lohmor: I feel that the future is bright undoubtedly; but it is essential to focus on the manner of implementation for faster turnaround. Countries like Canada, Sweden, and Denmark etc. where digital transactions occupy 75 to 80% share, implemented the system in a series of steps. Creating the right mind-set is what they did initially and scaled the initiatives from thereon. Tolls, transits and transportation, are some of the sectors they started with and then moved on to bigger things. With proper education and ensuring the right mindset creation, it is not difficult to make things happen.
Question: Why do you think that India will like this whole ‘Digital’ wave?
Dhinendra Lohmor: It is very obvious. India has a large millennial population. The young are the future key players of every sector. They love technology; they understand it, they know how to use it and the convenience it offers. They are tech-savvy, and want to use their smartphones for everything they do on a daily basis. For instance, I have a friend whose daughter is just 5 years old and she tells her dad to make payments using a card; as it looks ‘trendy’ and ‘cool’ as per her. So you can understand the impact the digital world has on the minds of the young generation.
Question: How should the digitization proceed?
Dhinendra Lohmor: As far as banking is concerned, Government and Fintech organisations can start with the procedure of paying bills. The long queues where people stand to just pay bills are a nightmare that repeats itself every month for various things. Start colony-wise or region-wise, spread over a few kilometres. Make a focal point say, E-Seva where people can come with their cards, see how things work and complete the cumbersome process in seconds. Further, they should be taught that all this can be done from home without spending so much time, thus improving the quality of life. Another step will be to provide improved infrastructure; internet being foremost. People should be offered direct/indirect incentives for doing digital transactions; for example, lower toll charges if a digital transaction is done, discount on electricity, water, gas bills if paid digitally. Appoint facilitators & trainers at government bill collection centres to explain the procedure for carrying out digital transactions by use of smart phones etc. The trainers can train people in layman language, avoiding the usage of complicated USSD codes of their phones.
A large segment of population resides in villages who can be a major potential user base for digital money transactions. For this Government could recruit trained and educated youth and create human touch points to spread awareness on the use of digital money in their community. Involvement of panchayat members for encouraging others to adopt such transactions can help enormously.
Providing clarity to merchants regarding interoperability of digital money for P2P and purchasing of goods and services, will make them comfortable towards accepting digital transaction and they would in turn encourage their customers towards digitization too.
‘Servers are down’ is an epidemic that still ails the digital sector of India. For the government’s vision of a digital economy, it is imperative to address issues such as this. Simultaneously, progress should be measured on the basis of new policies that encourage positive economic and social change. The combination of digital money management, FinTech, advance smart phone technology and clear strategy will revolutionise the frictionless delivery of digital financial product to every nook and corner of the country.
Dhinendra Lohmor is an Angel Investor. He has a strong and reputed background in corporate and investment banking and is a firm believer in the power of positivity.