Now, it is a matter of increasing awareness and keeping transaction charges low, he added.At present, only 5% of personal consumption expenditure in India happens digitally. The 600 million debit cards are used mostly for ATM withdrawals while credit cards number merely 20 million. The Aadhaar-enabled payment system for those who don't have phones is likely to enable digital payments by about 350 million people.For digital payments to catch on, sellers will need to come on board on a large scale. Nilekani said a combination of low transaction charges and formal sector credit will help. But when they accept digital payments, the income trail will make them eligible for credit from the formal sector at much lower interest rates, besides other products like insurance policies.

Source: Economic Times January 15, 2017 05:44 UTC