By Sunil Mani
August 21, 2026
SUMMARY
When a consumer in India buys a toothpaste on Flipkart, or sweets at a local store, or bananas from a street vendor, or pays for an Uber ride, she pays by scanning a QR code, sent by the vendor, via her Google Pay App on her cell phone. To protect themselves, consumers are expected to use a security PIN.
The vendor receives immediate confirmation from their bank that the payment was received, assuming there are enough funds in the customer’s bank account which is linked to her App. Once approved by the sender’s bank, the funds move directly to the recipient’s bank account.
Google Pay, PhonePe and other apps also enable consumers to receive electronic payments from employers, banks, and government programs. These platforms replace similar transactions made in the past using cash and checks.
There is hence an urgent need for an annual study to examine consumer losses, arising from fraud and other risks, especially for the elderly and those who have not completed secondary education. The study should also identify the true, total costs for a consumer to use the electronic payments system. Such studies should be both easy to conduct and accurate since the data is electronic, offering all the details of every transaction. The studies, perhaps funded by the Reserve Bank, ought to be done by a reputed, independent research institution.
Until such studies provide insights on consumer losses and costs, there will be legitimate doubts when Indian officials claim that the country’s rapidly expanding digital-payment system is a major success.
Sunil Mani is a visiting professor, Centre for Development Studies, and Ahmedabad University, both in India. The views expressed are personal.
