Among the most ubiquitous features of modern India is the QR code. From trendy boba shops and bustling vegetable bazaars in urban megalopolises to roadside tea stands and ramshackle corner stores in barely-there hamlets, one is hard pressed to find a storefront without QR codes for payment apps like PhonePe, Paytm, and GooglePay. These apps allow buyers and sellers to make instant and secure digital transactions between bank accounts using the Unified Payments Interface (UPI), a central bank-backed platform.
Pramod Varma, former Chief Architect of UPI, Aadhaar, and IndiaStack, explained in a lecture and panel conversation on Thursday, October 12, that UPI is only one part of the digital public infrastructure (DPI) comprising IndiaStack, a collection of interfaces transforming India’s economy and society. It includes Aadhaar, a 12-digit biometric identity number; eKYC, or electronic Know Your Customer; and DigiLocker, which converts paper documents to digitally verifiable certificates.
Speaking to an audience of over 60 people in Luce Hall, Varma outlined the ways in which the DPI revolution has transformed the lives of Indians. In a country where less than 20% of the population was banked in 2008, banking penetration surpassed 80% by 2017. Aadhaar, eKYC, and DigiLocker made registering bank accounts and getting loans faster, simpler, and cheaper. Today there are 1.38 billion people in India with digital IDs and more than 860 million bank accounts. Indians can get vaccinated, sign contracts, and pay for services, all on IndiaStack. Varma, who pioneered the development of IndiaStack, now serves as CTO of EkStep, an education nonprofit; co-founder of the Foundation for Interoperability in Digital Economy (FIDE), a digital infrastructure nonprofit; and Co-Chair of the Center for DPI. In his opinion, everything that has been done with DPI so far is just the tip of the iceberg.
Varma argued during his presentation that DPI can be used to create open source networks that “unlock” the relationships between buyers and sellers, allowing both Amazon and your local bookseller to exist on the same playing field. One example Varma provided of how this works is in transportation. When transportation actors of all kinds—taxis, buses, ferries, payment service providers—use the same network protocol, riders can access all of them without having to switch between a dozen different transportation services, making mobility seamless for users and business easier for providers large and small.
Varma has worked toward the expansion of open network ecosystems using the Beckn Protocol, “an open and interoperable protocol for decentralised digital commerce” that brings together all players into the same digital market. Though it was developed in India, Beckn is now being tested for everything from agri-commerce in The Gambia to electric vehicle (EV) charging in the Netherlands and reskilling in Brazil.
Much of Beckn’s utilization in India has focused on enabling scalable, distributed solutions to e-commerce and mobility challenges. Because the same protocol can be used for many purposes, services using open protocols are interoperable, meaning someone could access a mobility solution at the same time that they order food—from two different parties. “This creates an enormous opportunity for entrepreneurs,” Varma added. But Varma has a new challenge in mind: using open source protocols like Beckn to address the “wicked problem” of climate change. In his talk, Varma outlined six facets of resolving the climate crisis and accelerating the green transition for which DPI and open protocols might hold the solution.
For the first, creating open sustainable energy networks, Varma argued that open protocols can unite EV charging networks, charge point operators, battery aggregators, community microgrids, energy storage providers into cohesive systems that minimize waste, reduce complexity, and solve energy needs. For each of the other challenges—creating efficient carbon markets, building an efficient circular economy, improving urban governance, climate relief efforts, and reskilling for the green transition—he outlined the ways in which building networks of actors can reduce marginal costs, expand inclusion, and scale up climate solutions by making trust, identification, and data sharing easy, interoperable, and secure. Talking about the problem of reskilling to meet the needs of the green transition, Varma was clear: “These are not platform plays. We are not setting up a website. We are not setting up one more platform. We are saying, ‘If you have a learning platform, if you have money, you can connect to the grid.’ You don’t go to LinkedIn to find a job. This is a job internet.”
Varma concluded by emphasizing that just as governments build highways but not cars, DPI is a “digital highway” that provides the means for all sorts of parties—entrepreneurs, consumers, nonprofit organizations—to connect on a level playing field that provides inclusive, accessible goods and services. He held that “for a country like India, DPI is not a choice,” but it still comes with risks and challenges, and a strong civil society and careful attention is needed to ensure that it does not exacerbate existing problems.
After his presentation concluded, Varma was joined for a panel discussing DPI and its potential by Charity Troyer Moore, Scientific Director of Inclusion Economics at Yale University; Alix Peterson Zwane, Senior Fellow at the Yale Jackson School and CEO of Global Innovation Fund; Duvvuri Subbarao, Senior Fellow at the Yale Jackson School and former Governor of the Reserve Bank of India; and Rohini Pande, Henry J. Heinz II Professor of Economics and Director of the Economic Growth Center. The panel responded to Varma’s comments, discussing the implications of India’s digital transformation experience for other low- and middle-income countries, the significance of increasing data availability in the developing world, and the need to change power structures concurrently with expanding financial and digital inclusion. The event then concluded with questions from the audience.
Byline: Daevan Mangalmurti