Bangalore, 11th April: While the UPI system has provided a catalyst to take the Government’s dream of a cashless India forward, new statistics & insights about rural India’s digital financial inclusion indicate that there is still a lot of work to be done in achieving this dream.
Over the last few months, 1Bridge, one of India’s leading village commerce networks, conducted a series of field research to understand/gauge the payment behaviour and the UPI usage in villages. According to the survey, only 3-7% of rural consumers are actively using UPI. The main reasons cited for limited UPI usage were:
Around 40% are unaware of UPI & digital payments and don’t know how to use it including expressing fears of losing their money through such payments
Around 20% expressed a preference for cash-based payments
Around 10% cited low bank balance or inactive bank accounts
1Bridge also tracked thousands of UPI transactions from a group of rural consumers in a specific 30-day period. A deeper analysis of UPI usage patterns of those using it, produced some interesting insights:
The average transaction value was INR 1450 – which is a fairly significant amount
Paying for goods and services in stores accounts for 40% of all transactions. UPI is highest in the Hotel, Provision Store and Hardware store
Online payments account for 15%
11% of transactions are loans or repayments between individuals
6% are cash pass-through payments intended for someone else, without a UPI
In India, specifically in the Southern states of Karnataka, Maharashtra, AP/Telangana, TN & Odisha, 1Bridge operates in 10,000+ villages across 77 districts in these states through a network of 10,000+ trusted, local entrepreneurs are known as 1Bridge Advisors, who serve as advocates for digital and financial inclusion, assisted commerce & last-mile delivery.
By driving awareness on UPI & handholding consumers to do their first UPI transaction through this network, 1Bridge expects that it can drive up the UPI usage in rural India to 20-25% over the next 12 months.
1Bridge recently partnered with WhatsApp in Oct 2021 to promote digital payments in rural parts of India. 1Bridge and WhatsApp hope to help 500 million users understand and take advantage of digital payments through this partnership. As part of the pilot programme, villagers in Karnataka and Maharashtra learned how to use digital payments, set up a UPI and do their first transaction using Payments on Whatsapp.
To strengthen its presence and expand its reach, 1Bridge has partnered with the Karnataka State Rural Livelihood Promotion Society to train & onboard over 6000 women entrepreneurs as 1Bridge Advisors as well. It is now looking it replicate this model across other States as well.
Madan Padaki, Founder & CEO, 1Bridge, said “We aim to accelerate financial and digital inclusion, so everyone can benefit, even in the most remote regions. Our partnership with the Karnataka State Rural Livelihood Promotion Society and WhatsApp enables us to take several steps towards this goal.
“Our 1Bridge Advisors interact with villagers every day,” he added. “They understand the pain points and can address any fears or reluctance to adopt UPI payment. Our sustained efforts on this front will enable us to demonstrate the benefits of UPI soon, increasing its penetration throughout rural India.”
