Accelerating Financial Inclusion of the Urban Poor: Role of Innovative e-Payment Systems and JAM Trinity in Alleviating Poverty in India

Abstract

Financial exclusion of low-income groups in urban areas remains a key policy challenge in India. This study examines the potential of e-payment systems and the Jan Dhan Aadhaar Mobile (JAM) trinity in enhancing access of the urban poor to social welfare schemes, thereby alleviating poverty. A survey of 585 economically weaker section households across 12 cities in Punjab state was conducted. The results indicate greater awareness of mobile and UPI payments compared to cards, but adoption gaps exist across demographic segments. Younger educated male earners perceive individual benefits like convenience and government benefits like transparency in e-payments. Integrating innovative e-payments in welfare programs increases the reliability of transactions, leading to positive multiplier effects on income, assets and skills and reducing vulnerabilities for the urban poor. The findings highlight the need for targeted initiatives by policymakers and Fintech firms to digitize payments and customized implementation measures to promote adoption among low-income citizen groups. This includes digital literacy programs, trust-building, co-creating tailored products and integrating e-payment mechanisms into social schemes. Thus, leveraging Fintech innovations through strategic policies and cross-sector partnerships can significantly advance financial inclusion to create a more equitable digital economy where the urban poor are not left behind.