Penetration of Digital Transactions in Rural India and Financial Inclusion: An Analysis of Progress and Problems

Purpose: India primarily had remained a major cash-based economy until early 2000s. The economy was rapidly growing, complemented with advanced technology, services, and manufacturing sector growth. Methodology: The research methodology adopted is secondary research with descriptive analysis. As technology progressed, people gained access to mobiles and started getting connected to the world. As everything got involved, so did the banking sector, which integrated itself with digital transactions. Findings: The introduction of digital transactions made transferring money easy, reliable, and secure amongst people. The present study delves into the penetration of digital transactions in rural India and its role in fostering financial inclusion. Practical Implications: This research sheds light on the spread of digital transactions and their intensity in rural India, recognizing the need for concerted advocacy and policy building to ensure proper integration of the digital network to achieve greater financial inclusivity. Further, this study explores the availability, intensity, and problems related to digital transactions and financial inclusion in the country. Originality/Value: The findings of the research indicate that despite numerous government initiatives on digitalization of payments, enhanced transparency, increased security, reliable trustworthiness, and an “integrated digital payment system” would go a long way toward enhancing long-term economic growth and achieving greater financial inclusion in India.