Leading digital payment gateways in rural India

The push towards a digital economy in India is now focused on its growth in rural sectors of the country. The Indian Government along with multiple players in the payment gateway sector are coming up with various initiatives to help ease money transitions for the rural population from cash to digital. Some of these methods are truly innovative and disruptive that offer both options for payments – offline and online. Needless to mention that these are exclusive to our Indian economy making waves globally.

These initiatives include:

a. Aadhaar based payments

A large number of fintech’s have launched the Aadhar Enabled Payment System ( AEPS). This service works using a laptop and a biometric scanner. For this the user needs their bank account linked to an Aadhar card number to use this service. It will help users to conduct online transactions using micro-ATM’s and other services offered.

b. SMS-based payments

Many fintech’s and banks are offering SMS Pay.
This is an easy way to reach rural markets. A payment link is sent to the customer’s mobile number that can help make the payment directly to the merchant’s bank account. This payment solution is helpful to enable citizens at the last mile so they can perform hassle-free transactions.

c. Mobile/Micro ATMs

When it comes to mobile ATM’s, these are available to all those individuals who have an account under the scheme of Jan Dhan Yojna. This approach especially has been making digital money more easy, accessible, and effective for rural India population.

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Banks and fintech’s are working to offer a secure micro-ATM network and help people in the rural sector to withdraw, deposit and transfer money along with checking their bank balance. It is essentially offering basic banking services to every single person of the country, to the last mile.

d. UPI123pay

Launched by RBI, this is an Interactive Voice Response based UPI service which can be used by people without a smartphone or the internet. Users of this can give a missed call to the pre-defined IVR number displayed on the merchant’s counter, enter their UPI PIN when asked to complete the money transaction.

This service is a giant leap forwards for mass inclusion of our rural sector and is estimated to target 40 crore non-smart phone users as per an article by Outlook India. This service has democratized digital banking and eliminated dependence on the internet for banking.

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We explore some of the leading digital payment gateways that are approaching rural economy setups:


UPI is Unified Payments Interface, this is basically a real-time payment system which essentially helps to make money transfers between two bank accounts instant via the application.

BHIM (Bharat Interface for Money) is an application developed by the National Payment Corporation of India (NPCI) that caters to retail payment systems under the guidance of the Reserve Bank of India.

BHIM UPI is a payment application that offers its users to make easy, simple and quick payments. This ease comes from the UPI feature. Direct bank payments can be made to anyone using UPI ID (unique to each person) and request for money from people who owe you.

This app is a true game changer for the rural economy for its inclusivity of multiple small banks spread across the corners of the country.

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2.India Post Payments Bank

They are focused on creating a safe space for handling money and empower rural India with the help of a click. There are over 650 branches becoming the hub for 1.55 lakh post offices PAN India to reach a potential of 80 million people over a period of next few years with their plans.


Making digital accessible to the last mile is in their motto.
In 2021, Phone Pe announced that it had already digitized 25 million small merchants and Kirana stores in India. Also reflecting a 200% growth in their offline merchant transactions from a year before. Attributing this growth to their expansion and acceptance across many geographies within the country along with a field force of 1,25,000 who have been instrumental to drive this acceptance. They also introduced P2M transactions on PhonePe – which includes payments made by its users offline or online and all utility payments like phone recharge, bill payments and other financial services.


They are mindfully building a network to cater to the financial needs of millions of Indians that are under/unbanked and help them to move ahead with digital banking. Many small businesses in India, especially in rural parts of the country are not part of the banking financial system. This is where IppoPay is pacing towards – reaching the rural offline business. Their own website mentioned how the Bharat merchants account for 30% of India’s GDP which involves 460 million people – a significant number to cater to and bring to modern financial technology.

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In 2018 PayTM announced it will rope in 1 crore new merchants via its QR based payment solutions and this will be primarily achieved via Tier-2 and 3 towns. Since then, the company has focused on bringing onboard offline stores merchants like the Kirana stores, the neighbourhood local stores and shops and small vendors and outlets. In this scheme they also focused on building a focus on bringing on board local transport groups and small business owners of transportation vehicles.

Let’s not forget the other players, each of whom are making their own difference in the large Indian ecosystem. It’s not a one player game to reach over 1 billion people at the farthest corners and last mile of the country. These players include the likes of GPay, WhatsApp Pay, Mobiwik, PayPal amongst others.

The digital economy is the need of the hour in rural India, and it is about time to have their financial inclusion, literacy, and confidence towards the payment gateways systems.

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