Making Digital Work For Women: Receive-Only UPI Handle Innovation

India’s digital revolution in the last decade has transformed how young, tech-savvy, urban customers handle their finances digitally. This digital adoption, however, has proven challenging for India’s poor and has especially been out of reach for underprivileged women. Many low-income women continue to transact in cash, walk several kilometers to withdraw Direct Benefit Transfer (DBT) subsidies from a Banking Correspondent (BC) or branch and rely on local money lenders in times of crisis.

The digital divide persists for low-income women as access to smart phones and even feature phones still remains limited. Only 63% of women own mobile phones and only 21% use mobile internet services1. Even for the women with access to phones, socio-economic barriers, poor digital literacy and prevalence of a cash-driven economy impedes them from adopting digital methods.

Women are half the population and if we learn to reach them through digital services, we tap a huge market. The answer is simple: financial service providers need to find innovations that simplify how digital services can be made easy for women, rather than expecting women to somehow become more digitally savvy.

Creating a bank-generated receive-only-handle to use the United Payments Interface (UPI-R) is an example of such an innovation to make receiving digital payments for women as easy as dealing in cash. Whenever women need to receive money, they should simply share the UPI handle – which is only an address – to receive payments into their accounts. Concerns over fraudulent transactions are also minimized as we suggest limiting the UPI-R ID to allow only money to be “received” - so the same cannot be misused by someone to send money from her account. By limiting it to a receive-only handle, banks do not have to rely on the users for creating a UPI handle and linking it to their account. Instead, the bank can do all the work and women only need to learn how to share an SMS which provides the UPI ID details. In this manner, the UPI-R offering can serve 230 million Jan Dhan women account holders without having them learn how to download a UPI app, to create an ID and to link their accounts.

This proposition of a bank-generated UPI ID has been tested in a limited manner under few government schemes such as PM SVANidhi for street vendors. The promising result of the scheme provides a pathway to digitally empower 420+ million women and men Jan Dhan accounts holders who have a compelling need to receive money. In our urban cities, 85% of workers, typically migrants, are employed to provide service to firms and the top 15% high-income citizens. Migrant workers usually are Jan Dhan account

holders and receive money from people who are typically already a part of the 150-million active UPI user base. With only 14% of women skilled digitally to download or use an app compared to 32% of men2, we need an innovation to allow women to benefit from UPI. With the receive-only UPI handle, women without advanced digital skills will be able to receive money across distances and instantly.

As women become more comfortable with usage, they themselves may learn to download apps and create a fully-functional UPI handle at a future date. Their usage of other financial products and services could potentially expand as their confidence in banking grows through easy-to-use solutions. Moreover, banks can use these digital payments to assess Jan Dhan customer’s credit worthiness and start actively lending to them.

Three-pronged approach for banks and government to enable for the adoption of UPI – R ID:

a) Make it convenient to obtain a UPI-R ID for Jan Dhan users

For Jan Dhan users, who have so far been un-banked or underbanked, going digital is a daunting process. It is imperative for banks to make the process of obtaining a UPI ID extremely simple.

Parvati is one such Jan Dhan customer who witnessed a digital transformation after receiving a UPI ID. Her breakfast kiosk had to be shut down after the nation-wide lockdown was imposed due to COVID-19. She quickly transformed her business into catering for daily meals but found it difficult to collect payments physically. Her Banking Correspondent suggested she apply to digitize her account and receive a UPI scan code and ID from her bank. Once she received her ID, [email protected], she found it easy to memorize and share with her customers.

To nudge users to begin their digital journey, banks can generate the UPI-R ID at the time of account opening or whenever customer request one and communicate it via SMS or through QR codes printed on passbooks. Banks must ensure that the back-end generated UPI ID is easy for women to remember.

b) Build awareness of UPI-R as the address of the Jan Dhan accounts

Just like Parvati, some women may not be familiar with UPI and the way it works. Banks and regulators could invest in building broad-scale awareness on UPI-R and dispel fears of fraudulent use. Banks also need to build capabilities of their last mile delivery agents such as Parvati’s Banking Correspondent, who can guide women users in the initial stages.

Anecdotal evidence shows that women can adopt a technology better if they are made to understand practical benefits of using it. Gender-disaggregated research is required to identify common needs such as receiving monthly wages and payments that can be communicated through awareness programs.

c) Enable behavior change by nudging and incentivizing women to use UPI-R

To make using UPI-R a common mode for digital transactions it would require a behavioral change. To catalyze this change, banks could provide rewards-based incentives such as cashbacks to encourage women to adopt it and continue using it. While a lockdown may have compelled Parvati to start using UPI, banks will need to invest in a reward mechanism that incentivizes her to continue using it, especially since transacting in cash is the norm and behavior change needs an incentive. Women who are introduced to UPI-R should be engaged continuously through reminders via SMS or IVR to drive usage.

Given the broad context of socio-economic inequality faced by women, merely providing a UPI ID may seem like a small victory. But for the woman who leaves her household responsibilities unattended to collect payments or who is unable to secure credit to expand her business, these measures are potentially transformative. Regulators and banks should capitalize on the opportunity that enabling a simple ID for Jan Dhan accounts, presents a pathway of prosperity for women and their families.

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