An Indian think tank established by the country's leader, Narendra Modi, is foreseeing a giant leap toward mobile transactions.
The Wall Street Journal reports that Amitabh Kant, CEO of NITI Aayog, which consults the government on long-term policy, claimed to an international forum that the country could soon see a revolution in financial technology that may make plastic payment obsolete within the next three years.
“By 2020, India will make all debit cards, all credit cards, all ATM machines, all [point-of-sale] machines totally irrelevant,” the Journal quoted Kant as saying at the Pravasi Bharatiya Divas annual event in the tech hub of Bangalore.
“In 30 seconds flat, we’ll all be doing our transactions by using our thumb,” he added, referring to a new mobile payment app that was recently unveiled by President Narendra Modi.
The claim is hugely ambitious in an economy that is still overwhelmingly cash based. Hundreds of millions of Indians don't have a bank account, and at least 900 million can't get online. Smartphone penetration of the total population is under 30%.
In November, Modi made the unexpected move to invalidate the country’s two largest bank notes in an effort to rein in the black market and counterfeit cash. The move took some 86% of India’s currency out of circulation, causing an enormous shock to the country’s largely cash-based economy. Endless lines formed at banks and ATMs as millions of people waited to exchange their now worthless cash for new bills. Many poor day laborers had to miss paid work in order to stand in line.
Last week, as a 50-day deadline for exchanging notes drew to a close, Modi announced the launch of a new digital payment app that he says will ease the financial transition. Bhim, which currently allows Android users to make paperless transfers from one bank to another, will soon be linked to India's identification program, called Aadhar, which will enable users to authorize payments with their thumbprint, the Journal reports.
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“In the next two years, the power of Bhim will be such that you wouldn’t need a smartphone, feature phone or even Internet. Your thumb would be enough,” Modi reportedly said when the app was launched on Dec. 30. He did not go into specifics.
The president says the app has been downloaded at least 10 million times — a drop in the ocean in relation to the country's total number of mobile phone subscribers, which number more than a billion.