According to a survey, Google Pay and PhonePe are the two most downloaded payment apps in India. You may be aware that these payment applications are built on the concept of Unified Payment Interface (UPI). But, did you know that UPI was the brainchild of India?

Well, UPI was launched by the Indian government through a dedicated organisation called National Payments Corporation of India (NPCI) in 2016 formed by the Reserve Bank of India (RBI).

Basically, the developed technologies are not only being highly leveraged in the Indian finTech space, but India is the flag-bearer for many of these technologies. This makes the Indian financial ecosystem an interesting place of discussion.

In the next video, you will learn about the various reasons that make India an exciting place for finTech.

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In this video, you learnt about the various reasons that make India an exciting place for finTech.

The Digital India programme of the Indian government was empowered by the launch of an open API policy, also called the ‘India Stack’. By open API, it meant that the API was publicly available to anyone who wanted to build an application using that set of API. Be it a bank or a technology player, everyone can develop an application using this set of API infrastructure (India Stack) to offer any services or facilities to the users. India Stack is a complete set of APIs and includes the services mentioned in the following table:

Key components	What It Does?
Aadhaar	It uses biometrics such as thumb prints and iris scans for the identification of a person.
DigiLocker	It is a safe deposit locker that can be used to store all legal documents such as Aadhaar card, Pan card and passport in a digitised manner. By giving consent to DigiLocker, you can share your government-issued documents with a third party.
Unified Payment Interface (UPI)	It enables real-time mobile payments directly into the bank account.
Financial Services Data	Privacy protects sharing of financial data by one financial institution to another with the consent of the user.

This India Stack infrastructure has enabled the government to carry out the Direct Benefits Transfer (DBT) scheme conveniently. The government of India has started several schemes for the benefit of the underprivileged and deserving citizens of India, such as the MGNREGA, which is operated through the panchayats and pays minimum wages to rural workers. However, due to a lot of middlemen involved in the process of transferring these benefits, the actual beneficiaries are either deprived of the benefit or not transferred the full benefit. It is also possible that few beneficiaries try to take advantage of this benefit more than once. With the India Stack infrastructure in place, the government can:

Eliminate the middlemen and transfer benefits to citizens without duplication, and
Prevent fraudulent activities and ensure that the schemes serve the purpose they aim to.

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Now that you have learnt about the relevance of finTech in India, in the next segment, you will learn about the building blocks of the Indian financial ecosystem.