India’s digital startups have an analog problem. They face a kagaz ka pahad. Literally. Many of them are designing for the digital desh of Bunty, the 37-yearold Udaipur shoe-seller who gets 40% of his business on his smartphone. Or, Chaitanya Bharti, Guntur’s 30-year-old single-room school teacher who gets remittances on her basic phone.
But every time they collect and store paper records, scrutinise “wet signatures”, and handle lots of physical cash, they can’t grow as fast, be as affordable or innovate to create the digital desh Bunty aur Bharti aspire to.
Nowhere is this more visible than in financial services where the kagaz ka pahad unwittingly aids what Prime Minister Modi called “financial untouchability”.
There is good news. The JAM trinity — a basic account like Jan Dhan, Aadhaar and mobile phones — makes it possible for digital services to reach every Indian. JAM is much more than aslogan — it is the result of public policy and technology that made this foundation a reality. With that foundation in place, public policy can go further. It must go further.
We don’t just give digital pioneers wings, we strap on booster rockets to launch them well over and past that kagaz ka pahad.
Incredible and necessary win for Aadhar in today's budget ! Cheers & Kudos to @India_Stack and @NandanNilekani
— Vijay Shekhar (@vijayshekhar) February 29, 2016
India Stack is just that. It is a series of new-age digital infrastructure which, when used together, makes it easier for digital pioneers to run faster, reach more people.
The Stack has four layers: (1) a presence-less layer where a universal biometric digital identity allows people to participate in any service from anywhere in the country; (2) a paper-less layer where digital records move with an individual’s digital identity eliminating the kagaz ka pahad; (3) cashless layer where a single interface to all the country’s bank accounts and wallets democratises payments; and (4) a consent layer which allows data to move freely and securely to democratise the market for data.
Each layer has a specific technology — Aadhaar authentication and eKYC, eSign and Digilocker, Unified Payments Interface, and consent architecture — with corresponding public APIs, under India’s Open API policy.
The National Payments Corporation of India released APIs for the Unified Payments Interface and is now running a hackathon for businesses to experiment.
You can go to indiastack-.org to participate. Each layer is managed as a public good. This is important. This makes the India Stack not just new-age technology but a smart policy. Technology stacks are not new. Uber, the highest valued startup on the planet, rose to success on GPS, Google maps, electronic payments and more.
In Kenya, the mobile payment service of M-PESA is like the cashless layer enabling a whole slew of digital businesses. What is different about the India Stack is that it is designed to level the playing field for newer, smaller entrants.
There is no one company or a handful of companies controlling access, behaving like bottleneck monopolies.
India Stack sets a global precedent. It is of Indian origin but not India-specific. Bits and pieces exist elsewhere in the world but nowhere under such a common frame and vision. For example, globally, data has become a battleground for the future of business.
The consent architecture, arguably, is a breakthrough to democratise the market for data without compromising on security. The India Stack is designed to propel the digital world forward in India or anywhere.
Guest Post by Kabir Kumar leads FinTech initiatives at CGAP. Sanjay Jain is a volunteer with iSPIRT Open API team.