Can digital tools trigger behavioural shift in how Indians save?

Shivnath Thukral
digital payments, savings in india, gpay, phonepe, upi payments, mobile transactions, indian express

In the last few years, the Unified Payments Interface (UPI) is another such innovation which has demonstrated the promise of digital transactions.

I stepped into the world of journalism a year after India entered the first wave of the telecom revolution under the National Telecom Policy of 1994. Even though mobile telephony looked like a distant dream then, the transformation occurred at an exponential pace. I recollect travelling deep inside Chattisgarh to cover a union strike at a newly privatised company. Typically, that meant I had to painstakingly hunt down a public phone and patiently wait there to report my story at the time the bulletin was being aired. The advent of the mobile phone was truly liberating for journalists. India was literally on the move and we never looked back.

These were just the first steps in a series of reforms that brought India out of a crisis and into an era of sustained economic growth. I’m proud that India embraced hope and optimism in its journey to reform our economy into the global economic power that it has become today.

What’s truly exciting is that we are at the beginning of this digital transformation. WhatsApp is at the centre of this revolution, but we have not gotten here alone. Thanks to the forward thinking of the Indian government, regulators and Indian businesses, whether you are in a city or a village, you can access high speed mobile internet at some of the lowest tariffs in the world. People are able to make video calls, chat with their loved ones, and even conduct business thousands of miles away.

In the last few years, the Unified Payments Interface (UPI) is another such innovation which has demonstrated the promise of digital transactions. Again thanks to the forward thinking of India’s technology leaders, we have a unique architecture that can scale to serve hundreds of millions of users and bring more people into the financial system to enjoy all the benefits of a digital economy. UPI is also the first example of India’s public digital infrastructure which can go global and help solve for many complex problems related to poverty and financial inclusion.

In India, many of those working in urban centres support their families who continue to live in rural India. There are many studies which show that those who are working as construction labourers in cities like Mumbai, save a large chunk of their wages to send home through relatives or friends travelling back for a minimal fee. Thanks to UPI and the Digital India initiative, sending and receiving money over WhatsApp is now as easy as making a phone call or sending a message and it is free.

Today people can send money using dozens of apps to one another or make a purchase at a local shop. In the future, we believe people will be able to do so much more, helping people and our overall economy. As per the latest Economic Survey released earlier this year, household savings has declined steadily over a six-year period of 2012-17 from over 7 to over 6.5 per cent. While this is one reason why household consumption is up, it is also a clear indication that for Indian households the potential of savings and turning them into investments is quite high. Can this behavioural shift take place due to digital tools along with the realisation that Indians will need to save more for a secure future through investments in financial instruments such as pension products?

We were lucky to hear from Shivkala, who runs a social enterprise called Things Etc. in Mumbai giving hundreds of women across the country a place to sell handmade crafts. She started using WhatsApp payments, which have made transactions easier. Now her sales are up because people trust it and they don’t have to download a new app – and the artists she works with get to see exactly how much they are earning. Hypothetically, if one of those artisans, a 20-year-old starts to save Rs 20 a day by making a digital transfer, she can get an inflation indexed monthly pension of Rs. 11,000 for 20 years at age 60. This could lead to a more secure future for her and keep her out of poverty.

Research shows that access to financial products and services empowers people to achieve their dreams and prohibits them from falling into poverty. India and its central bank have done a tremendous job so far, to reach every nook and corner of the country to ensure rural branches or bank correspondents to cover every village and district. This is India’s chance to build on that success by using digital technologies and platforms such as WhatsApp.

Another opportunity is if we could support the local shopkeeper’s ability to build long-term capital? Instead of keeping cash at home, what if people could build a financial record of their savings and transactions, earning them credit and the ability to invest in their future? In the past it would take days to set up this kind of investment plans. Soon, financial institutions will be able to do this nearly instantly for their customers right on their mobile phone and provide access where it is not currently available.

I have spent decades telling the stories of our diverse and vibrant nation. From banking reforms to a stock market boom, India witnessed an unleashing of private enterprise and consumer demand that has brought us to this unique moment in history. I am humbled and amazed at how far we have come and inspired by the opportunities before our nation. We are charting a unique path forward. Together we can build a more prosperous and Digital India.

Shivnath Thukral recently took over as Head of Public Policy for WhatsApp in India.