February 10, 2015 | By Renee Caruthers
India has reportedly begun a plan to wean itself off cash, helped in part by the country's rapid adoption of smartphones.
The National Payments Corporation of India, or NPCI, has published a unified payment interface API as well as technology specifications, which can be used by banks and merchants to send and receive payments, Finextra reports.
The plan apparently leverages the government's Unique Identification Authority of India, or UIDAI, a biometric-based identification system that gives all citizen an Aadhaar number.
The recently published payment interface would allow users with accounts to send and receive money electronically using their Aadhaar number, their cell phone number and a virtual payments address.
For India, a move to electronic payments might offer particularly high efficiency savings. A separate report commissioned by MasterCard and conducted by the Institute for Business in the Global Context, recently reported that Reserve Bank of India and commercial banks, annually spend the equivalent of $3.5 billion in currency operations.
Its cash to GDP ratio is 12 percent, compared to Brazil's ratio of 3.93 percent, Mexico's of 5.3 percent and South Africa's of 3.73 percent. Among India's challenges with cash are some unique logistical issues. In some areas, cash actually has to be helicopter in.