The initial challenge is to convey the message, through public campaigns and other means that cash is not less costly than digital payments, and everyone pays a price for cash usage.
Supplementing these efforts through policy directives that provide fiscal incentives to consumers and business to switch to digital payments is needed. Countries like South Korea have shown that through sustained fiscal policy efforts, cash usage can reduce significantly. Lastly, to complement the supply side innovations of GOI like Aadhar program, KYC regulations, and others, efforts could be taken, through public-private partnerships that enable innovative approaches to tailor bundles of financial services to suit local needs. Adoption is faster when users find the digital alternatives convenient to use and provides them with a sense of safety and security.
The World Bank’s 2016 World Development Report points out that to close the remaining digital divide, taking full advantage of the available technologies is a necessary but not a sufficient condition. Sufficiency requires that countries also need to strengthen important analog complements: regulations that allow firms to connect and compete; skills that technology augments rather than replaces; and institutions that are capable and accountable.
digital payments is faster when users find the digital alternatives convenient to use and provides them with a sense of safety and security.