In India, digital payments are changing the game for women entrepreneurs
by Ruth Goodwin-Groen, November 28, 2017
This blog post was originally published in the Huffington Post
This week the world’s preeminent business leaders, innovators, investors, and entrepreneurs are gathered in India for the eighth annual Global Entrepreneurship Summit (GES). GES2017 is focusing on the role women entrepreneurs play in advancing inclusive growth, with one key area of discussion being the digital economy.
The location of this year’s summit is no coincidence. Over the last several years, India has emerged as a driving force in the digital revolution. Host city Hyderabad is home to T-Hub, the country’s largest startup incubator, a partnership between the government of Telangana, three of India’s premier academic institutes (IIIT-H, ISB, & NALSAR), and private sector leaders.
Across the country, the Indian government has championed entrepreneurship and embraced innovation in high-growth industries, particularly financial technology. Significant infrastructure upgrades, advancements in biometric technology, multiple channels, new platforms, and an enabling regulatory environment have laid the foundation for the country’s broader digital financial ecosystem to take root and change the game for women entrepreneurs. Today, India serves as an inspiration for other countries working to accelerate their digital economies and advance financial inclusion, especially for women.
India, under PM Modi’s leadership, is now focused on building women’s economic participation and entrepreneurship using the digital economy.
India’s women entrepreneurs and the digital economy
is how much e-commerce in India is projected to hit by 2026
E-commerce in India is projected to hit $200 billion by 2026, at a 30% compound annual growth rate. This explosive growth has allowed aspirational entrepreneurs to attain nationwide reach for their businesses, creating a platform where they can credibly build their brand. With 8 million businesses run by female entrepreneurs, women are key to this growth, with homemakers, career women, and even Instagram sellers all taking part.
Over the last few years, the government’s “Make in India” initiative, “Digital India’” program, and many more have played a critical role in supporting such entrepreneurs, including government-backed loans for new ventures and launching a new online sales marketplace, “Mahile-E-Haat.” The growth of large innovative firms like PayTm and PayU as well as regional players like T-wallet in Hyderabad and others, has already played a key role in advancing digital financial inclusion. We’ll soon see these business models reach a whole new level in India, especially as they become interoperable, enabling access across all income segments and channels, including feature phones.
Why digital payments matter
of women-owned SMEs in emerging countries are unserved or underserved by financial institutions
The introduction of Indian digital payment platforms has revolutionized financial transfers through low-cost technology that enables mobile-to-mobile transactions. For a country with almost 1.3 billion people, enabling access across all income segments naturally opens the door for a whole host of possibilities – especially considering the IFC estimates that up to 70% of women-owned SMEs in emerging countries are unserved or underserved by financial institutions.
But before extolling the virtues of digital payments in fostering economic prosperity, growth, and financial inclusion, it is crucial to understand – and appreciate – the impact of being excluded from the digital revolution that has swept our everyday lives.
For a small business owner it means they aren’t able to easily and quickly receive payment for goods and services from further afield. For a budding entrepreneur, particularly a woman, the ability to receive online and mobile wallet payments is life-changing. Very quickly a business can transform from being hyper-local, into a successful national or even international enterprise. It also removes structural barriers that have previously held back a pool of aspiring entrepreneurs who did not feel empowered to realize their dreams.
Building trust and protecting consumers
While recognizing the positive benefits of a more open digital economy and a more diverse business environment, the process of disruption in payments can also create a number of fundamental challenges, especially when it comes to building trust and protecting consumers – as highlighted in the Indian government’s newly released white paper on data protection.
In an era where hacking and cyberattacks are all too common, and given the volume, velocity, and variety of digital transactions taking place in India, protecting customers’ digital data is critical. Trust is the bedrock of the digital financial services model.
On a practical level, proportionate regulation and supervision can help ensure transparency and responsible conduct by payment providers. Similarly, electronic money issuers must ensure customers have recourse options when there are technological glitches, and they must always keep client funds safe. Failure on either front can dramatically erode trust and confidence, acting as a setback to progress.
Fulfilling India’s potential
India is moving into the future at an unprecedented rate, fuelled by a potent combination of government leadership, administrative innovation, and entrepreneurial determination. And the path it is taking to get there is digital.
India is a member of the Better Than Cash Alliance, and other members are looking to keep learning from India’s leadership on how to nurture the nation’s next generation of entrepreneurs, particularly women who will thrive in their dynamic digital economy.
About the Author
Managing Director, Better Than Cash Alliance
Ruth Goodwin-Groen is Managing Director of The Better Than Cash Alliance, a UN-hosted partnership of governments, companies, and international organisations that accelerates the transition from cash to digital payments in order to reduce poverty and drive inclusive growth.
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