By Nidhi Tiwari and Nivedita Sinha
The evolution of the digital payments ecosystem has helped fuel India’s digital transformation with digital transactions increasing nearly 5x over the past six years. In fact, more than 40 percent of all payments in the country are now digital. UPI, which dominates the digital payments landscape, is being used by about 30 crore consumers and more than five crore merchants, according to the Reserve Bank of India.
This shift to digital payments is particularly empowering for small businesses—an essential component in India’s pursuit of a $5 trillion GDP—by fostering inclusivity and helping them transcend physical boundaries. For instance, an artisan or wholesaler in Varanasi can now seamlessly sell brocade sarees to customers in Bangalore via WhatsApp, list products on Amazon, and supply to large brands simultaneously. Similarly, a street vendor who is migrating from a remote village to the vibrant city of Mumbai can sell chaat and send money back home with just a click.
Change Is Coming From All Directions
According to ‘How Urban India Pays’, a new report by Kearney in collaboration with Amazon Pay, street vendors with average monthly revenue of Rs 10,000 to 40,000—including paan shops, fruit and flower sellers, food stalls, and Kirana stores—are increasingly shifting to digital payments, with nearly half of their transactions now being cashless. The shift is seen from both the merchant and the consumer side. For example, a customer in a metro city said, “I installed and used UPI for the first time at the insistence of a street-side pani-puri vendor in Bangalore, who said he no longer keeps change,” reflecting small merchants’ preference for digital payments. And according to the report, 63 percent of merchants accept digital payments for transactions under Rs 1,000 to avoid losing customers to competitors who offer these digital options.
Innovative moves from industry players, such as revolutionizing merchant onboarding, have expanded merchants’ reach and adoption. Government and financial institution innovations, including mini QR codes, card acceptance devices that cost a third of what traditional point-of-sale terminals cost, the National Common Mobility Card, and the indigenous card-based payment solution RuPay, which provides debit and credit card access to customers of all types of banks, have also accelerated the country’s adoption of digital payments.
Growth, convenience, safety, and efficiency are among the top benefits
Digital payments have enabled boundless growth for small businesses, effectively eliminating geographic barriers and expanding merchant access to consumers across India and beyond through quick and easy online transfers. According to the report, merchants prefer digital payments primarily because of the convenience (55 percent of respondents), followed by trust and safety along with the ability to track transactions (43 percent each).
Digital modes also improve safety and efficiency thanks to the ability to deposit funds directly into bank accounts, eliminating the need for handling cash. This enables faster fund transfers and reduces disruption to business with fewer bank visits. For migrant merchants and vendors, this eases the process of sending money back to their families.
Digital payment methods such as credit cards, debit cards, and UPI have streamlined transaction reconciliation, making it easier for merchants to identify and resolve discrepancies. This greatly improves efficiency, especially for small businesses.
This adoption journey has also given many merchants access to credit scores and formal banking system, improving their inclusion in the formal economy.
The Path Ahead
India’s digital payment sector is on a remarkable growth trajectory, driven by the enthusiasm of businesses and consumers alike. However, sustaining and even accelerating this momentum will require a coordinated effort from all stakeholders, including government bodies, regulatory agencies, banks, NBFCs, and fintech companies, to enhance consumer and business awareness, build trust, and fuel penetration.
Although adoption rates have surged, there is room to expand digital payments in smaller towns and among small to mid-size merchants. However, merchants are still concerned about financial fraud and unreliable Internet. The extent of such concerns varies depending on the type of business and the geographic region. For example, more respondents cited unreliable Internet as a concern in the East–Northeast compared with the rest of India.
Prioritizing areas such as tapping into street commerce, developing user-friendly interfaces, upgrading technology in underserved regions, and bolstering security measures to reduce cyber fraud will be crucial. Growth can be accelerated by innovation and the embrace of emerging digital payment methods, including co-branded cards, buy now, pay later (BNPL) schemes, and wearable and voice-based payment technologies.
India is steadily establishing itself as a global leader in digital payments as consumers continue to experiment with and embrace new technologies and as businesses remain open and receptive to this evolving landscape.
(The authors, Nidhi Tiwari, Partner, Kearney, India and Nivedita Sinha, Principal, Kearney, India.)
Views are personal and do not represent the stand of this publication.
Israeli Prime Minister Benjamin Netanyahu says he is hopeful of a compromise on the row over Jerusalem settlements after talks in Washington.
He boarded his plane back to Israel talking of a "golden way" to revive Mid-East peace talks but there was no official comment from the White House.
Mr Netanyahu met President Barack Obama and held last-minute talks with Mid-East envoy George Mitchell.
Neither he nor US officials gave details of what was discussed.
The row over Israel's plans for homes in occupied East Jerusalem has caused one of the worst crises in US-Israeli ties for decades.
 There were no photo calls with President Obama |
The White House had reportedly been trying to persuade Mr Netanyahu to commit to several trust-building measures to revive hopes for indirect "proximity talks" between Israel and the Palestinians.
The Palestinians pulled out of moves towards talks two weeks ago, after Israel unveiled plans to build 1,600 homes in the East Jerusalem settlement of Ramat Shlomo.
The project was approved during a visit by US Vice-President Joe Biden - a move which Washington initially branded an insult.
Extended visit
Scant information on the content of Mr Netanyahu's negotiations has emerged and rarely has so little been said about such high-level meetings, lasting so long, between the US and one of its closest allies, says the BBC's Richard Lister in the US capital.
Mr Netanyahu was quoted by news agencies as saying he thought a "golden" way had been found to move the peace process forward while preserving Israeli interests.
However, the Israeli daily Haaretz quoted him as saying that Israel was "trying to find the golden path".
Israeli sources quoted by Reuters news agency said Mr Netanyahu could not finalise any confidence-building measures until he presented them to his cabinet.
US officials speaking on condition of anonymity to the Associated Press news agency said the talks had not ended tensions over Israel's construction in East Jerusalem.
Mr Netanyahu had extended his stay by hours to work on a deal but the talks with Mr Mitchell ended at about 2000 (0100 GMT) on Wednesday without any announcements, one of the officials said.
Mr Mitchell had returned to the US following a meeting in the West Bank with Palestinian Authority President Mahmoud Abbas.
Earlier on Wednesday, White House spokesman Robert Gibbs said that President Obama had held "honest" talks with Mr Netanyahu, urging him to take steps to build confidence in the peace process.
Mr Gibbs added that the US was seeking "clarification" about the latest plans to build homes in occupied East Jerusalem.
Minutes before Mr Netanyahu's fence-mending visit to the White House on Tuesday, it emerged the Jerusalem municipal government had approved another development.
Twenty apartments are to be built for Jewish settlers on the site of an old hotel in the predominantly Arab neighbourhood of Sheikh Jarrah.
Mr Gibbs told reporters on Wednesday there were areas of agreement and disagreement between the sides.
"The president has asked the prime minister for certain things to build confidence up to proximity talks that we think can make progress," Mr Gibbs said.
He reiterated the American position that there was an "unbreakable bond" between the US and the Israeli people.
The Israelis said there had been a "good atmosphere" during Tuesday's talks.
But the BBC's Kim Ghattas in Washington notes Mr Netanyahu did not get the reception usually reserved for America's allies.
There was no press conference, no lavish welcome, and the White House did not even release a picture of the meeting.
It all signals that the US is playing tough, making clear it is upset with the Israeli government, says our correspondent.
Palestinians want East Jerusalem for their future capital, but Israel insists the city cannot be divided.
Nearly half a million Jews live in more than 100 settlements built since Israel's 1967 occupation of the West Bank and East Jerusalem.
They are considered illegal under international law, although Israel disputes this.
The Dubai government has announced it will provide $9.5bn (£6.4bn) in funding to help its Dubai World investment vehicle to restructure its debt.The troubled company has presented a plan to restructure $23.5bn of debt to its creditors, including converting $8.9bn of debt into equity.
Creditors will now decide on whether to accept the plan.
Dubai World stunned global markets in November last year when it asked for a six-month delay on debt repayments.
'Strong future'
The restructuring plan also involves a cash injection of $1.5bn from the Dubai Financial Support Fund (DFSF), as well as issuing two tranches of new debt to be repaid over five- and eight-year periods.
"This proposal represents the best possible solution for all stakeholders," Dubai World said.
"It follows extensive discussions with our creditors, a thorough review of Dubai World's businesses and significant financial support from the government."
Sheikh Ahmad bin Saeed al-Maktoum, chairman of the Dubai Supreme Fiscal Committee, said the proposals would ensure that both Dubai World and property company Nakheel were "key contributors to the strong economic future of the Emirate of Dubai".
"The government of Dubai, acting through the DFSF, will support these proposals with significant financial resources, including a commitment to fund up to $9.5bn in new funding over the business plan period."
'Good response'
Analysts said the proposals would be well received by investors.
"It boosts sentiment because this is a strong commitment," said Ayman al-Saheb at Darahem Financial Brokerage.
He said the companies could now begin "restructuring properly".
"Information is key in the capital markets, and now that we have received some information, we definitely expect a good response from investors."
After Dubai World first asked for extensions on debt repayments last year, major global stock markets fell as investors worried about the health of the Dubai economy.
Banks were hit particularly hard on concerns over Dubai's ability to pay back its debts.
Dubai World is the centrepiece of Dubai's economy and helped to drive the emirate's economic expansion.
By JOELLE TESSLER
WASHINGTON -- Two U.S. companies that sell Internet addresses to Web sites said Wednesday they had stopped registering new domain names in China because the Chinese government has begun demanding pictures and other identification documents from their customers.
One of the domain name companies, Go Daddy Inc., announced its change in policy at a congressional hearing that was largely devoted to Google Inc. ( GOOG - news - people )'s announcement Monday that it will no longer censor Internet search results in China.
Christine Jones, executive vice president and general counsel of Go Daddy, said the company's decision was not a reaction to Google but instead reflects its concern about the security of its customers and "the chilling effect" of the new Chinese government requirements.
"We just made a decision that we didn't want to act as an agent of the Chinese government," Jones told lawmakers.
Separately, a company that offers similar services, Network Solutions LLC, also said Wednesday it had stopped handling China Web registrations in December, for the same reason.
Zhong Shan, China's vice commerce secretary in charge of foreign trade, said he hadn't been briefed on the Go Daddy decision.
Speaking to reporters at the Chinese Embassy in Washington, however, Zhong called Google's decision an "exceptional case" that wouldn't undermine the confidence of foreign investors in China. He said China's economy wasn't perfect, but that the government is working to create a more attractive investment environment.
"China's policy of opening up remains unchanged," Zhong said through an interpreter. "We still welcome foreign investment."
Go Daddy - a company known for risque ads that mock congressional hearings - has been registering domain names in China since 2005 under authorization from the China Internet Network Information Center, a quasi-government agency. The company currently manages about 27,000 ".cn" domain names. That's a small slice of Chinese Web sites, and ".cn" names continue to be available through other resellers.
Go Daddy said the agency has always made the company, known as a registrar, collect customer names, addresses and other contact information since it began registering ".cn" Internet domain names. But late last year, Go Daddy said, the Chinese agency changed its policy to require ".cn" domain name registrars to also collect head shots, business identifications and signed registration forms from new customers and then forward that information to the agency.
Then, Jones said, the agency instructed domain name registrars to obtain this same information from existing customers and forward it too - warning that Web sites of customers who refuse to register would be disabled.
Go Daddy said it has contacted 1,200 of its customers with ".cn" Web sites, asking for the additional documentation and informing them that it would be handed over to the China Internet Network Information Center. The company said only about 20 percent of those customers have provided the documentation.
Now, Jones said, the company won't register new names. She did not say how much of the company's revenue the business was bringing in.
Network Solutions said in a statement that it dropped the service in December because the Chinese policy was "intrusive" and would have placed a burden on its customers.
Similarly, another domain name registrar based in the U.S., eNom Inc., wants to continue offering ".cn" Web addresses, but is worried that the changes China has ordered "could make it almost impossible to do it," said Jeffrey Eckhaus, general manager at eNom.
By John McCormick
March 25 (Bloomberg) -- President Barack Obama receives lukewarm ratings from Americans, at least until you compare him with other major political figures and institutions.
Fifty percent approve of the job he is doing, a Bloomberg National Poll shows, down from 54 percent in December.
Those favorability numbers look solid when compared with House Speaker Nancy Pelosi, Treasury Secretary Timothy Geithner, 2008 Republican presidential candidate Mitt Romney and both political parties, with voters unhappy about U.S. finances and the direction the nation is heading.
“It’s about the money,” says J. Ann Selzer, president of Selzer & Co., a Des Moines, Iowa-based firm that conducted the nationwide survey. “His scores are lowest when it comes to dealing with the budget, and it is the thing that inflames the American public. Government spending is the hot-button issue right now.”
Obama’s approval rating is roughly equal to what Bill Clinton had at this point in his presidency, according to data maintained by Gallup. It’s higher than the 45 percent Ronald Reagan recorded in April 1982.
Obama, 48, still enjoys an 85 percent job-approval rating among Democrats, compared with 46 percent among independent voters and 11 percent among Republicans.
Disturbed by Deficit
He receives higher marks for his handling of foreign affairs than on matters closer to home. Fifty-eight percent approve of Obama’s management of relations with other countries, while 54 percent approve of his running of the war in Afghanistan, the poll found.
Obama’s performance is viewed more critically when it comes to the budget deficit, dealing with the aftermath of the 2008 financial crisis, health care and job creation.
“The terrible economy has been a magnet pulling down Obama’s approval ratings,” says Mark Mellman, a Democratic pollster who worked for John Kerry’s 2004 presidential bid. “The fact that he has only been pulled down to 50 percent is a sign of the respect and affection people have for him. Being at 50 percent is actually a pretty strong place to be.”
The weakest category among those tested for Obama was the deficit. Only about a third of Americans approve of the way he’s dealing with the nation’s finances.
With 80 percent of poll participants agreeing with the statement “government spending is out of control,” Selzer says there is a political opening for Republicans in November’s congressional elections, if they can maintain the notion that Obama and Democrats are spending too freely.
Can’t See Progress
“Everything sounded good when he was running, but nothing is really getting done yet,” says John Gabrys, 46, a stay-at- home father and former physical education instructor who lives in Somonauk, Illinois. “I haven’t seen any progress.”
Gabrys, who considers himself an independent, says he voted for Obama. He gives the president a “C+” on his presidency so far, although he says he could improve his grade by generating more jobs.
“Everyone’s numbers are atrocious because nobody is delivering,” says pollster Doug Schoen, who worked for Clinton during his presidency. “If the Democratic Party is unable to address the economic problems, then they are gone.”
With unemployment at 9.7 percent, 58 percent of Americans believe the nation is headed in the wrong direction, essentially unchanged from December. Ninety percent of Republicans and 62 percent of independents think things are going poorly, while less than a third of Democrats feel that way.
Worried About Leaders
The depressed mood is reflected in concern about the nation’s leaders, with 56 percent of respondents pessimistic they will find solutions to challenges facing the U.S. That skepticism rises to 83 percent among Republicans and 62 percent among independents.
The poll of 1,002 U.S. adults was conducted March 19-22. It has a margin of error of plus or minus 3.1 percentage points.
Obama’s numbers look better when measured against other public figures.
Federal Reserve Chairman Ben Bernanke is viewed favorably by 34 percent and unfavorably by 23 percent, with 43 percent saying they weren’t sure what to think about him.
Like Bernanke, Obama attracts more favorable than unfavorable ratings, 53 percent to 42 percent, with just 5 percent not sure.
Geithner Down
Geithner is less popular, with 25 percent holding a favorable view, 28 percent having a negative view and 47 percent unsure.
Pelosi is seen favorably by 31 percent, while 48 percent have an unfavorable view and 21 percent are unsure.
Both major political parties have numbers better than Pelosi. The Democratic and Republican parties have almost equal favorability at 42 percent and 39 percent, respectively.
Romney is regarded favorably by 31 percent and unfavorably by 26 percent, with 43 percent unsure.
At 31 percent, the economy was most often cited as the top issue facing the nation, followed by health care at 22 percent, and government spending and the federal deficit at 20 percent.
For Republicans, government spending and the deficit are virtually tied with the economy for the top spot at 32 percent and 33 percent, respectively. Just 8 percent of Democrats say government spending and the deficit is the most important issue.
“I feel like we are creating problems that my daughter’s kids someday will pay the price for,” says Laurie Hartman, 49, an administrative assistant and Republican who lives in Syracuse, New York. “We think we can fix problems by throwing money at them.”
To contact the reporter on this story: John McCormick in Washington at jmccormick16@bloomberg.net;
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