How domestic money transfer supports the growth of digital India?

Domestic money transfer is a process of electronically transferring money from one bank to another within India. This service is predominantly availed by migrant workers in metropolitan cities sending money to their loved ones in rural areas for sustenance. Domestic money transfers account for roughly Rs. 200,000/- crore every year. 

Domestic money transfers through Aadhaar-Enabled Payment System (AePS) have a surge with the launch of Prime Minister Garib Kalyan Yojana.  The reason is that more had money to send to their families.  The AePS is a type of payment system in India that allows financial transitions at PoS terminals through the Business Correspondent. It has been implemented by several sections of the society, as it gives access to financial and banking services through Aadhaar.   

During the COVID-19 lockdown, the total number of domestic money transfers had plummeted by up to 90%. However, by the beginning of 2021, it revived and increased significantly leather sofa set. One section that saw a sudden pike after the lockdown was airline agents providing tickets. Another reason behind the surge in domestic money transfers is the return of immigrant workers to cities. 

Wide acceptance of digital modes of payment 

The number of internet users has increased exponentially over the past years, thanks to the increasing availability of smartphones and high-speed internet connectivity. The total number of mobile users in India amounts to 1.17 billion as of 2020. Also,  India ranks the second-highest in Fintech adoption rate, after China. 

India’s current digital payment sector stands at worth $200 billion and is expected to grow up to $1 trillion by the year 2023. 

The government of India is simultaneously working with Fintech companies to accelerate the acceptance of digital modes of payment all over India, even in the remotest area. Several financial inclusion programs have come into life,  such as the Pradhan Mantri Jan Dhan Yojana, Aadhaar, and Unified Payment Interface (UPI), leverage the increasing use of smartphones and the internet. UPI recorded 2.23 billion transactions in 2020, which is worth Rs. 4.16 trillion. UPI is a real-time payment system developed by the National Payments Corporation of India (NCPI). With it coming into the bigger picture, there has been a significant reduction in the cost of infrastructure for Fintech companies.  

WhatsApp Payment: A new way to send money in India 

With the launch of WhatsApp Payment, people can now send and receive money at zero cost. WhatsApp Payment is a new feature added to WhatsApp that allows sending money to anyone from the contact list. It is designed on the NCPI’s UPI system, allowing transactions with over 160 supported banks. Some of these banks are the State bank of India, Punjab National Bank, ICICI, HDFC, and Axis Bank.  

Using the WhatsApp In-Chat Payment feature, people can transfer money to anyone in the contact list in the same way as sending a message. It allows instant domestic money transfers via Virtual Payment Address (VPA). Individuals do not need to provide a bank account or IFSC code. It is a safe, easy, and quick way to send money to another account. The best part is that it is available 24/7, which means that individuals can make a domestic money transfer from anywhere at any time without any hassle.   

DakPay: the talk of the town

Dakpay is India’s new digital payment app launched by the Department of Posts (DoP) and India Post Payment Bank (IPPB). It is launched as part of India’s efforts to provide digital financial services at the last mile across India, leaving no one behind. 

The main purpose of DakPay is to offer digital financial and assisted banking services across the country through India Post and IPPB’s Postal Network (Dak) to meet the financial requirements of different sections of society. The services of DakPay include:  

  • Sending money to loved ones domestically. 
  • Scan QR codeS and make digital payments for products and services through Virtual Debit Card and with UPI. 
  • Ensure a cashless ecosystem through biometrics. 
  • Provide digital banking services to customers of any bank in India through an Aadhaar-Enabled Payment System. 
  • Utility (electricity and water) bill payment services. 

Through DakPay, individuals can make instant domestic money transfer with UPI. It can also be used to make payments at online stores and shopping outlets, such as Amazon, Flipkart, BigBasket, Big Bazaar, KFC, Pantaloon, Zara, BATA, etc. 

To use DakPay, individuals need to link their bank account and transfer money using the BHIM UPI. It is a safe and reliable platform to make domestic money transfers. It allows people to check their account balance, add beneficiaries, and manage multiple bank accounts.