INTEGRATED PAYMENTS AND FINANCIAL INCLUSION : AN INDIAN PERSPECTIVE

Financial inclusion remains a firm priority and an untapped opportunity for financial players in India. However, the majority of India’s unbanked - who number around 190 million - do not require traditional banking services except payments.

The payments they receive for providing goods and services represent one of the major sources of income for the rural population (nearly 70 percent of the country). Currently those payments predominantly take the form of cash or cash-based post office money orders. With 90 percent of its branches located in rural areas, the India Post Office is perfectly positioned to partner with the unbanked community to conduct non-cash payments and other banking transactions.

To facilitate this, an integrated system is needed to link India’s banks and post offices. In this paper, we look at the scale and operational requirements of this opportunity and why for India a combination of traditional and digital approaches is the best way forward.