Eight in ten new UPI users are coming from Bharat

• Aadhaar facilitated the Government of India in extending support to over 900 million beneficiaries, totaling $400 billion.
  
• The elimination of fraudulent or duplicate IDs through the use of Aadhaar has resulted in an estimated government savings of approximately $34 billion.
  
• DigiLocker has broadened its document coverage, and includes banking, financial services, and education, through collaborations with private sector entities.
  

The use of UPI has gone beyond metros. Around 70% of UPI's current users hail from beyond Tier-1 cities. Also, more than 80% of new users emerge from locations in Tier-2 cities and beyond, according to the ‘Impact of DPI on the Indian Internet Economy’ report by Redseer Strategy Consultants.

With a user base exceeding 350 million, UPI stands out as an incredibly successful digital asset, revolutionising India's transaction landscape. Currently, approximately 45% of all transactions within the country occur digitally, with UPI commanding a significant share of 52%, surpassing 10 billion monthly transactions.

The convenience associated with UPI payments has spurred the development of an expansive network of merchants, the digitalization of operations, and a noteworthy shift in consumer preferences.

Aadhaar, the game changer

Aadhaar's seamless digital ID verification has significantly enhanced governance effectiveness, leading to substantial cost savings for the government. By reinforcing the direct benefit transfer framework and policies, Aadhaar facilitated the Government of India in extending support to over 900 million beneficiaries, totaling $400 billion in cash and in-kind benefits across 313 schemes.

The elimination of fraudulent or duplicate IDs resulted in an estimated government savings of approximately $34 billion.

“Additionally, Aadhaar-based eKYC procedures streamlined processes such as bank account openings, issuance of credit cards, and filing of income tax returns, digitising various facets of government-citizen interactions,” says the report.

Digilocker and FastTag gain users as they mature

The success of Aadhaar, eKYC, and UPI have paved the way for various other Digital Public Infrastructures (DPIs) and the evolution of India Stack. Among these, platforms like DigiLocker and FasTag have matured considerably and amassed substantial user bases.

The ongoing expansion of these initiatives has led to the development of innovative products and applications, exploring new use cases. For instance, DigiLocker facilitates KYC/ID verification and dynamic linking of insurance and health records, while FasTag enables parking fee payments using its balance, among other functionalities.

The government has amplified the DigiLocker framework through DigiLocker 2.0, aiming to streamline the Know-Your-Customer (KYC) process across various financial and alternative services. This initiative revolves around centralising the process, eliminating redundant procedures at different touchpoints.

“Embracing an enterprise-level approach for MSMEs, trusts, and other entities will enable companies to alter documents, changes of which will be reflected in personal DigiLocker accounts achieving high interoperability,” says the report.

Furthermore, DigiLocker has broadened its document coverage, and includes banking, financial services, and education, through collaborations with private sector entities.