From the days of standing in line for hours to making bill payments digitally, India has indeed come a long way. In fact, in contrast to most nations, India has crossed this journey in the shortest possible time. Today, the country can boast about some of the strongest retail payment frameworks, which is at par with (or at some levels, even better than) that of the advanced nations.

Let's take a look at the history of payments in India, and how the country has gone from traditional methods to contemporary ones.

- Traditional methods of making payments
Long, long ago, much before the idea of money took birth, goods and services were bought and sold, or rather exchanged using the barter system. This arrangement, over time, evolved into the concept of money, and involved the usage of precious metals like gold and silver. Much later, when governments came into existence, they introduced currency notes and coins to be used as the legal tender to conduct economic transactions. As this payment system evolved and gained popularity, people found 'cash' to be a simple and very convenient mode of transaction. This system has been in existence for ages now and is still the most used means to make a payment. Then came a novel instrument called "cheque." The function of a cheque was to instruct the bank to effect the transfer of money from one bank account to another. Additional infrastructure around it, consisting of the drawee and drawer bank, and the clearing houses also came into existence.
Although, cheque were quite convenient, and safe (as it did not involve handling of cash), people continued to face the discomfort of standing in long lines to make payments, till cheque dropboxes made an entry.

- Modern methods of making payments
For the longest time, the chief payment instrument that existed in the country was cheques. It was only during the late 90s, when the Information and Technology sector saw a sudden boom throughout the world, that a large number of alternate payment systems and innovations were seen to be evolving. These advancements eventually arrived in India, and brought with them products like debit cards, credit cards, electronic funds transfers, internet banking and so on. This revolutionized the payment methods completely. From having only one medium to make payments, people now had a platter full of options to choose from.

But digital methods, just like the banking and the cheque system when they were newly introduced, made people very sceptical. It was the newness of the model, and the security concerns around keying in confidential banking details, that made them apprehensive. That is when RBI decided to intervene. They undertook several measures, and introduced several regulatory changes and reforms to ensure the highest safety and security. With confidence restored, several businesses welcomed the new system of accepting payments. Be it the electricity board or your mobile or DTH operators or retail shop, digital payments are now accepted by one and all.

With Banks and Payment Apps striving to make the payment experience more seamless and easy, people are increasingly adopting digital payment platforms and enjoying from the convenience. People are now effortlessly using facilities like Net Banking, ECS, NEFT, IMPS, AEPS (Aadhaar Enabled Payment System), Unified Payments Interface (UPI), and so on. If you too wish to explore the convenience of digital bill payments and need any assistance or have question about them, you can speak to our relationship manager. 


The growing use of internet over the mobile phone has made mobile a natural choice for both customers and service providers alike. Taking cognizance of this fact, the government too has extended its support to several bill payment options like prepaid payment instruments (PPI), mobile and digital wallets, payment banks, and the revolutionary "The Bharat Bill Payments System", an application that caters to the requirements of ‘anytime anywhere anyhow’ bill payments and supports all forms of electronic payments.

India has been enjoying a healthy digital evolution since the last three decades. Despite that, it still feels as if this is just the beginning — for so much more lies ahead!

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Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Kotak Mahindra Bank Ltd. and its employees.