Issue Details

A STUDY ON THE INFLUENCE OF DIGITAL PAYMENTS IN INDIA

ABSTRACT

Countries all over the world are strengthening their economies by adopting financial technology, in particular the rapid advancement of digital payment systems. This is being done in order to eliminate problems such as counterfeit currencies, black money, and funding for terrorist organisations, as well as to stabilise and formalise economies. India is, without a doubt, in the lead position with its innovations such as the UnifiedePaymenteInnovation (UPI) and the AadhaareEnablediPaymentiSystem (AEPS). The usage of debit or credit cards, electronic wallets (also known as e-wallets), and net banking are all examples of digital transactions. Digital transactions are a form of payment that does not involve the exchange of physical currency. With the implementation of demonetization on November 8, 2016, the current administration in India has encouraged the growth of the country’s digital economy. Efforts to demonetize the currency contributed to the formalisation of the economy, an increase in tax collection, and a faster rate of economic expansion. The fundamental goal of India’s demonetization initiative was to transform the country from a society that does not comply with its tax obligations into one that does so. Black money that had been stored idly in the homes of black-market traders made its way back into the financial system, and as a result, the money is now being invested in the economy and making its way around in circulation. The lack of Point of Sales (POS) terminals, the low penetration of internet networks, the lack of awareness in the unorganised sector and rural areas, the threat of cyber fraud, and the resistance of people due to their lack of confidence in the digital economy with the existing infrastructure were the primary challenges during the demonetization process. This research paper focuses on the current situation of the digital economy in the Indian context and offers recommendations for how policymakers, the financial industry, and consumers may better understand the significance of the digital economy and the issues it faces.

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