Only 3% Indians shop online; China sees 45%

A minuscule 3% of 133 crore Indians shop online or pay their utility bills via the Internet as against 45% in neighbouring China, over 70% in the UK and the US and an average 15% in all other BRICS nations.

Further, only 5% Indians access their banks through their mobile phones or broadband while the percentage is much higher in other middle and high-income countries, according to a data set released by the Reserve Bank of India (RBI), which also shows that for every 100 Indians, there are over 87 mobile phones and a rapid expansion of Internet network.

The RBI, which released a report on India’s payment systems, said the country’s performance on digital payment was abysmally low and that it could be pushed by targeting a larger population of the millennial generation or those born between 1982 and 2004, who have a greater aptitude for digital products.

“The most straight-forward approach to have a digital push would be to target the generation which is most responsive to technology and the digital age. Since India has a large population of Millennium Children or Generation Y, the aptitude for digital products is large and possibly larger than countries such as Japan and Europe which have an ageing population,” the central bank said in its report “Benchmarking India’s Payment System”.

One of the key reasons for the acceptance of digital payments in India was rewards attached to online purchases, especially in non-metros. Hence it suggested that the payment service providers personalise rewards beyond cash-backs and create loyalty programmes.

“Such incentive programmes help in driving and sustaining mass adoption and engagement to digital payments,” the central bank said.

In metro cities and towns, however, the convenience factors such as not carrying cash, one-click payments and easy to track small payments worked more in favour of digital payments than rewards and offers, the data showed.

To tackle the low digital payment of utility bills, India launched the Bharat Bill Payment System, an integrated bill payment system in 2017. It is a platform that brings banks, e-commerce portals and online payment platforms under one roof as its official operational units for bill collection of electricity, telecom, direct-to-home (DTH), gas and water.