Since time immemorial, cash has been the primary medium with which we buy and sell goods and services. It was during the moments where we would scrummage for change or drop notes while rushing that we hoped there could be an easier way. Well, in the last few years, online transactions, namely UPI (United Payments Interface), have become extremely popular in urban India and have made life comparatively easier and more convenient.
However, the impact of digital transactions in rural areas has been slightly different as compared to in urban India. This is due to a variety of factors such as lack of digital or financial literacy, safety, etc. This blog will delve into understanding the usage of UPI in rural areas and how it affects rural women entrepreneurs.
Rise of UPI usage in rural India
Digital transactions came about with the start of the Digital India Initiative on 1 July 2015 and UPI was launched in 2016 by the National Payments Corporation of India thereby helping achieve RBI’s vision of a less-cash society.
So, why have UPI transactions become so popular? This could have a number of reasons such as: -
- An increase in relatively affordable mobile phones, making UPI more accessible in rural areas.
- It is a way to have market reach instantly without including many intermediaries or dealing with large amounts of cash.
- UPI transactions are free and so they are also cost - efficient for rural women entrepreneurs.
- Through government initiatives such as Pradhan Mantri Jan Dhan Yojana and Digital India Initiative, many rural women who previously lacked access to banking services now have bank accounts linked to their mobile numbers, making it possible for them to use UPI and access government benefits without relying on cash.
Challenges of UPI adoption for rural women entrepreneurs
A survey done (by EY India) showed that nearly 38% in rural and semi-urban India preferred using UPI as their mode of payment. So, what about the rest of the people? Why is it that they choose to not use the more “convenient” method? This preference to cash may be the result of a multitude of reasons such as: -
- A lack of financial and digital literacy, especially since the survey stated that 18% of women were unaware of any financial inclusion schemes in the first place.
- Most rural areas do not have very good internet connection and since UPI requires good network connectivity, using it becomes inconvenient for the women entrepreneurs.
- Due to their unawareness of financial situations, many rural women entrepreneurs end up falling for certain UPI scams which risk their finances and business.
- Most UPI platforms only use a select few languages and so the women who only speak in their regional language may not understand it.
Case study: -
Pradhan Mantri Matru Vandana Yojana OTP Scam
In Rajpar village in Gujarat, several women enrolled under the Pradhan Mantri Matru Vandana Yojana (PMMVY) received phone calls from individuals posing as government officials. The callers claimed that the women's maternity benefits could only be released after they completed a "verification process" and since they knew personal details about the women, they seemed genuine.
The callers then asked the women to share the One-Time Password (OTP) sent to their phones or click on a link to verify their bank details. Many of the women became suspicious refused to cooperate but, unfortunately, two women believed the callers were genuine and followed their instructions. Together, they lost nearly ₹20,000.people’s trust by pretending to be bank officials or government representatives.
Even though this incident was centred around a government scheme rather than a business-related transaction, it is extremely helpful in understanding the risk of being financially unaware for rural women entrepreneurs. As people start relying on digital methods of business more, fraudsters also start exploiting people’s trust by pretending to be bank officials or government representatives.
WeAct’s contribution
Through the Energizer Workshop, WeAct aims not only to equip rural women entrepreneurs with essential business knowledge but also to strengthen their digital and financial literacy. WeAct educates women on key financial tools such as UPI and digital payments, enabling them to manage their businesses more efficiently and confidently. At the same time, we raise awareness about common digital frauds and scams, teaching entrepreneurs how to identify warning signs, protect their personal and financial information, and use digital payment platforms safely.
Conclusion
UPI has transformed the way people make payments, and for rural women entrepreneurs, it has opened the door to faster transactions, wider market access, and greater financial independence. However, technology alone is not enough. To truly benefit from digital payments, women must also have the knowledge and confidence to use them safely.
As the PMMVY scam illustrates, fraudsters often exploit trust and a lack of digital awareness rather than technology itself. This makes digital and financial literacy just as important as access to smartphones or the internet. By learning how to recognise scams, safeguard personal information, and use UPI responsibly, rural women entrepreneurs can protect both their businesses and their livelihoods.
At WeAct, we believe that empowering women goes beyond teaching them how to start or grow a business. It also means ensuring they can confidently navigate the digital economy. With the right knowledge, support, and awareness, UPI can become more than just a payment method. It can be a tool for financial inclusion, business growth, and long-term economic empowerment.