Cashless India

At peak hours, the downtown market in Rishikesh, India becomes a melting pot for the senses. Thousands of customers pack into a few square blocks, filled with hundreds of merchants selling an enormous range of wares. Some merchants have large brick-and-mortar storefronts, equipped with air conditioning and an army of employees to help customers. Squeezed in and around these are multitudes more informal merchants: mobile groceries and food carts, rickshaw drivers, and other small businesses. Combined, these paint the picture of India’s booming retail economy.

Over the past few years, though, a new type of noise has risen across this market, brought on by payment QR codes plastered across every storefront and payment till. Gone is the clinking of coins and rustling of rupee bills, replaced instead by the telltale beeps of fulfilled payments, as customers scan QR codes with their smartphones. How did a country dominated by cash in 2016 come to see nearly 120 billion digital transactions in 2023? How has India, in just eight years, become the undisputed global leader in Real-Time Payments? And what does it mean for the rest of the world as India seeks to export this technology and infrastructure?

These are the questions I explored in my dissertation for my MSc in Social Science of the Internet at the Oxford Internet Institute, during the first year of my Rhodes Scholarship. It’s also a question that brought me to Oxford in the first place. Watching my grandparents suddenly start paying for their groceries every morning with their phones, as opposed to cash, was a transformative moment for me, one that I wrote about in my Rhodes application and spoke about in my interview. It led me to the nexus between technology and international development and drove me to ask bigger questions about how technology can drive (and hurt) development outcomes.

It was thanks to the Murray-Speight Grant, and the support of the Rhodes Trust more broadly, that I was finally able to conduct research on digital payments in India. Last March, I interviewed fifteen merchants across cities in Uttarakhand, India, namely Rishikesh, Roorkee, and Haridwar. These merchants ranged across several goods and service sectors, from gold jewelers, to saree stores, to rickshaw drivers, to street-side fruit stands. They spanned a wide economic spectrum, with some making less than ten thousand USD a year to others making over 10x that in a month. These interviews, conducted in Hindi and face-to-face, explored merchants’ relationship with digital payments, namely the Indian Unified Payments Interface (UPI). I asked merchants when, how, and why they adopted the technology and what they thought about its future.

I found that the UPI story is far more complex than whether a merchant simply has a QR code taped next to their cash box. Existing development technology research often focus on the personal background of the user – their age, education, gender, etc. However, I found that external factors, such as Indian tax policy and the structure of upstream wholesale markets, all shape UPI experiences even more than individual background. Moreover, I found that efforts by the Modi Administration to signal Indian ascendency and modernization through UPI have had a smaller footprint than expected. Merchants and customers love the tool, but rarely does this translate to approval of the Administration.

Ultimately, my thesis highlights what a high-end gold jeweler and a coconut water stand have in common when it comes to digital payments. It examines why highly educated and high-earning business owners only adopted this technology a few months ago, compared to the average auto- rickshaw driver adopting it years prior. And overall, it shows the complexities in the digital payments story, one which has increasingly become a core of the story of India’s rise.

Beyond this, though, it was an incredibly enriching experience. I visit India every year with my family and often find myself reverting to my childhood self. My parents and relatives point the way, and I follow. This research was my first time building my own, personal relationship with India. Going out in the marketplace with just my nanaji (maternal grandfather), shaking hands and chatting with merchants of all kinds, all this radically transformed my confidence and relationship with the country. (It’s also turned my once-extremely broken Hindi into something slightly more passable).

If you’re interested in reading my full dissertation, you can get in touch with me via the Rhodes Trust. Once again, my sincerest thanks to the Murray-Speight team and the Rhodes Trust for making this research a possibility.