India’s digital revolution over the past decade has transformed the way young, tech-savvy urban clients manage their finances digitally. This digital adoption, however, has proven difficult for India’s poor and has been particularly out of reach for disadvantaged women. Many low-income women continue to do cash transactions, travel several miles to withdraw Direct Benefit Transfer (DBT) grants from a correspondent bank (BC) or branch, and rely on local lenders in times of crisis.
The digital divide persists for low-income women as access to smartphones and even multifunction phones remains limited. Only 63% of women own a mobile phone and only 21% use mobile Internet services1. Even for women with access to phones, socio-economic barriers, low digital literacy, and the prevalence of a money-driven economy prevent them from adopting digital methods.
Women make up half of the population and if we learn to reach them through digital services, we are tapping into a huge market. The answer is simple: Financial service providers need to find innovations that simplify how digital services can be made easy for women, rather than expecting women to become one way or the other. other more digital savvy.
The creation of a bank-only generated receipt handle to use the United Payment Interface (UPI-R) is an example of such an innovation to make receiving digital payments for women as easy as processing it. ‘cash. Whenever women need to receive money, they simply have to share the UPI ID – which is just an address – to receive payments into their accounts. Concerns about fraudulent transactions are also minimized, as we suggest limiting the UPI-R ID to only allow “received” money – so that someone cannot abuse it to send money to from his account. By limiting it to a receiving ID only, banks don’t have to rely on users to create a UPI ID and link it to their account. Instead, the bank can do all the work and the women just have to learn how to share an SMS that provides the UPI ID details. In this way, the UPI-R offer can serve 230 million women with a Jan Dhan account without having to learn how to download a UPI application, create a login and link their accounts.
This proposed bank-generated UPI identifier has been tested to a limited extent under a few government programs such as PM SVANidhi for street vendors. The program’s promising result paves the way for the digital empowerment of more than 420 million women and men with Jan Dhan accounts who are in dire need of receiving cash. In our urban cities, 85% of workers, usually migrants, are employed to provide services to businesses and to the richest 15% of citizens. Migrant workers are usually on Jan Dhan’s account
holders and receive money from people who are usually already among the 150 million active users of UPI. With only 14% of women digitally qualified to download or use an application compared to 32% of men2, we need an innovation to enable women to benefit from the UPI. With the UPI receiving handle only, women without advanced digital skills will be able to receive money remotely and instantly.
As women become more comfortable with using it, they themselves can learn how to download apps and build a fully functional UPI handle at a later date. Their use of other financial products and services could potentially increase as their confidence in banking grows through easy-to-use solutions. Additionally, banks can use these digital payments to assess the creditworthiness of Jan Dhan’s customers and begin actively lending to them.
Three-pronged approach for banks and government to enable UPI – R ID adoption:
a) Make it easier to obtain a UPI-R identifier for Jan Dhan users
For Jan Dhan users, who have so far not been banked or underbanked, going digital is a daunting process. It is imperative for banks to make the process of obtaining a UPI ID extremely simple.
Parvati is one of those clients of Jan Dhan who witnessed a digital transformation after receiving a UPI ID. Its breakfast kiosk had to be closed after the nationwide lockdown was imposed due to COVID-19. She quickly transformed her business into catering for daily meals, but struggled to collect payments physically. His correspondent bank suggested that he request the scanning of his account and receive a UPI scan code and ID from his bank. Once she has received her ID, [email protected], she found it easy to remember and share with her clients.
To encourage users to start their digital journey, banks can generate the UPI-R ID when opening an account or whenever the customer requests it and communicate it by SMS or via QR codes printed on booklets. Banks should ensure that the UPI ID generated at the back end is easy for women to remember.
b) Promote UPI-R as the address for Jan Dhan accounts
Just like Parvati, some women may not be familiar with UPI and how it works. Banks and regulators could invest in large-scale awareness of UPI-R and allay fears of fraudulent use. Banks also need to build the capacity of their last mile delivery agents, such as the correspondent bank in Parvati, who can guide women users in the early stages.
Anecdotal evidence shows that women can adopt a technology better if they are made to understand the practical benefits of using it. Gender-disaggregated research is needed to identify common needs such as receiving salaries and monthly payments that can be communicated through outreach programs.
c) Enabling behavior change by encouraging and encouraging women to use UPI-R
Making UPI-R a common mode for digital transactions would require a change in behavior. To catalyze this change, banks could offer rewards-based incentives such as cash back to encourage women to adopt it and continue to use it. While a lockdown may have forced Parvati to start using UPI, banks will need to invest in a reward mechanism that prompts them to keep using UPI, especially since cash transactions are the norm and the behavior change needs an incentive. Women who are initiated to UPI-R must be continuously engaged through SMS or IVR reminders to conduct use.
Given the vast context of socio-economic inequality that women face, simply providing a UPI ID may seem like a small victory. But for the woman who leaves her household responsibilities unattended to collect payments or who is unable to obtain credit to expand her business, these measures are potentially transformative. Regulators and banks should take advantage of the opportunity that allowing simple identification for Jan Dhan accounts presents a path to prosperity for women and their families.
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