India's Digital Public Infrastructure is a Blueprint for Global Success
Not just for emerging economies!
India’s digital public infrastructure (DPI) is a model for the world to follow, so much so that the “India Stack” is now being researched or adopted across the globe.
Think of DPI just like government-sponsored roads that allow the flow of goods and commerce. In their digital form, they allow the delivery of financial inclusion, economic opportunity, and social services.
The key is that India views digital as “public infrastructure,” a 180-degree shift from the West where digital roads are private and you pay for the privilege of use.
India is onto something big, and its “India Stack” is just as valid in developed economies as in developing ones.
👉TAKEAWAYS
Aadhaar, UPI & FASTag have enabled value creation of ~0.9% to India’s GDP in 2022.
By 2030, the economic value add from DPIs has the potential to increase ~3X- from current 0.9% to 2.9-4.2%
Over 30 countries are either adopting or in early discussions to implement UPI, Aadhar, and Beckn
UPI payments crossed 9.3 bn in volume and Rp 14.75 trillion in value
DPIs are digital utilities that create a foundation on which various digital services can be built.
DPIs can be a digital public platform - Non-exclusive, non-rivalrous digital networks that allows two or more parties to interact (with govt. involvement).
DPIs can also be Digital public goods - Any open source, open data, open AI, software, etc., openly available to use, procure and deploy.
DPI’s three critical components:
Identity layer (Aadhaar digital ID)
Enables secure and unique identification of individuals, and businesses and facilitates seamless authentication, verification, and integration of identity information, enabling efficient delivery of public and private services.
Payment layer (UPI)
Facilitates secure and convenient transactions between individuals, businesses, and the government and aims to promote a cashless economy, enhance financial inclusion, and simplify the process of giving and receiving payments by leveraging technology and interoperable payment solutions.
Data Exchange layer (DEPA)
DEPA, less familiar to most, provides consent-driven open-data! It is a standardized, consent-driven, and interoperable platform where individuals, businesses, and government agencies can securely share and access data.
India’s DPI provides a middle way between private tech’s walled gardens (think WeChat, Alipay, Visa, or Mastercard, and single provider government sources. It provides open access which private companies can build on.
👊STRAIGHT TALK👊
India’s concept of Digital Public Infrastructure represents a major breakthrough not just for the developing world but developed as well.
With the government providing public infrastructure for payments and ID, they are fulfilling their role in providing critical infrastructure no different than bridges and roads.
There are costs involved in running the system, but with a GDP positive impact, these costs are justifiable and manageable.
Some will consider DPI government overstep. Government digital ID, is particularly offensive to some. India’s DPI, however, provides open APIs (see above) that encourage private-sector innovation.
The “India Stack” is easier to export than China’s equally impressive digital payment system based on private companies WeChat and Alipay.
While both allow for free, or near free, payments, China’s system was built by private companies using a mix of proprietary and public technology that is difficult to reproduce.
Amazingly India has entered into MOUs to provide the India Stack at no cost to Armenia, Sierra Leone, Suriname, Antigua, Barbados, Trinidad and Tobago, Papua New Guinea, and Mauritius.
India’s DPI works and is a fine blueprint for any nation’s digital future.
Thoughts?
Hey got anything to say about this article? I and others in our “Cashless” community would love to hear it!
Don’t pull your punches. Tell me why I’m right or wrong, but don’t miss this opportunity to leave a comment!
A big thank you to all my subscribers! I appreciate your notes telling me how much you enjoy reading this newsletter!
Join the community by subscribing! You’ll be glad you did!
