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Prime Minister Narendra Modi’s digital ambitions have set high goals for the telecom and road transport sector. This will not only push growth in e-commerce, but also entail the transformation of the country’s economy into a digital economy through cashless payments. According to reports, cashless payments account for 15% of $1.5 trillion worth of consumer spending. These can rise to 60%-70% in the next two years. This will also enable new revenue channels and reduce overheads of companies with a positive financial bottom line.Telecom and transport are two important public services, which are aiding India’s digital transformation. With more than 1.19 billion mobile phone connections, of which 350 million are smartphone connections, telecom has bagged an unparalleled reach. Deepak Chandani, CEO, Worldline South Asia and Middle East, told BE, “We are already seeing cashless mobile recharges happening in a big way. People are also using cashless means to pay utility bills like telecom, buoyed by the ease of use of mobile wallets and cashback offers by service providers, schemes or banks. As infrastructure improves and 4G adoption increases, telecom will act as the backbone for digital services across the nation.” Telecom services will be the enablers behind various digital payments like mobile banking Internet payments, mobile apps etc.Transportation, including fuel and toll payments, is the second growth driver that the government has focused on. Highway toll plazas are increasingly having dedicated Electronic Toll Collection (ETC) lanes for contactless payments and faster transit.ETC is expected to be a big change agent on the digital map. Commuters can easily get a FASTag service from banks and pass through the ETC lane without waiting to pay cash or swipe their cards. The government too has launched a mobile app through which highway commuters can buy FASTags that will be delivered at their doorstep in a day.Fin-tech playing a crucial partNew solutions and products have been introduced that are allowing users across devices to use technology for everyday transactions. The average consumer, who earlier depended a lot on cash, has a host of options to choose from debit and credit cards, prepaid cards, mobile wallets, etc. and make online payments through internet banking, mobile banking, payment apps, QR codes and now the indigenous UPI (Unified Payments Interface). Fin-tech products like those mentioned in addition to NEFT, RTGS and IMPS has brought down the cost of transactions and reduced the need for and cost of cash. The incentives by the government have made it more lucrative for merchants and businesses to use/accept cashless transactions as well.Chandani added, “In terms of card transactions at POS, we generally see a growth of about 25% per year, whereas this year we are witnessing a nearly twofold increase of transactions. A large part of this growth comes from debit cards, that earlier made up around 57% of card transactions, contribute to 75% to 80% of card transactions today. In June, the Reserve Bank of India data showed that 1.8 billion digital transac- tions, including RTGS, retail payments, cards, PPIs and mobile banking.”Targets for road transport and highwaysDeepak Chandani said that both departments have the highest targets that lie upward of 5 billion digital transactions. Currently, only 7 lakh vehicles have active toll tags, of which most are commercial vehicles. 360 of 375 toll plazas on Indian highways are to be equipped with dedicated FASTag lanes. NPCI has also spoken of working on an integrated payment card that can be used across public transport in the country.Telecom operators are driving adoption by converting existing subscribers to their own wallets. Airtel has already launched its payments bank and is extending its reach and services to semi-urban and rural areas. Jio, a newcomer, has also received approval for a payments bank and launched its own wallet and betting big on UPI.Although the government had recently made a statement in parliament that the volume of digital transactions has declined, industry experts feel that the positive effects of demonetisation is the promotion of the digital and cashless economy. Commenting on the same, Chandani added, “The movement towards digital transactions witnessed an unprecedented acceleration on the back of demonetisation, which encouraged people to use digital means and wean away from cash. Now, with the return of cash in the economy, people have the choice of using cash or cashless means for their transactions. Naturally, there is a dip in the numbers as a section of population reverts to using cash for most purchases. But the new normal has settled at around 2.5x and that by itself shows the potential digital transactions have in India.”Challenges Financial literacy and an updated digital infrastructure are the needs of the hour. There is scope for more players to enter the space and for existing players to offer more enhanced and innovative products to different audiences. According to Chandani, “As the growing number of consumers demand superior products and complementing services, providers should be able to keep up with the scale of growth. Capacity building is important to handle increasing transaction volumes. Also, on-ground infrastructure should be improved in depth and width to reach every corner of the country. Thirdly, processes like stringent KYC and security standards cannot be compromised at any cost. Fraud and risk monitoring is very important as a growing financial services industry also attracts more fraudsters. Service providers and banks must make necessary investments in keeping their systems and processes safe, as one bad experience can result in lost customers.” Broadband connectivity too needs to be spread across towns, cities, and villages.