The Indian government has plans to launch a digital payment gateway for e-governance services across 11 states in the country, by March 2012, reports PTI, quoting Shankar Aggarwal, Additional Secretary at the Department of Information Technology. 20 services from both central and state governments are going to be linked to the platform within two to three months.

The report states that the National Securities Depository Limited (NSDL) will be the vendor for this service, and will be paid on the basis of each transaction made. According to its website, NSDL runs the following online services:
– SPEED-e: enabling demat account holders (including Clearing Members) to submit delivery instructions directly on the Internet through https://eservices.nsdl.com
– IDeAS: allows investors to view balances and transactions in demat accounts updated on an online but not real time basis.
– STeADY: which allows brokers to deliver/submit contract notes to custodians/ fund managers electronically by transmitting digitally signed trade information with encryption.

At present, NSDL manages 11,855,311 Demat accounts, and will need to handle millions of transactions each month if the e-governance payment gateway does become pervasive, primarily due to the monopolist nature of many government services. The Indian Railways, for example, reported 13.5 million transactions last month through its e-ticketing service IRCTC. The DIT is expecting at least 10 million transactions a year, which is a rather low estimate. Even if the transaction fee is Rs 10, that is Rs 10 crore a year in transaction fees.

A few questions remain:
– Single platform across states, but not single vendor? The report quotes Aggarwal as saying that “The idea (behind the common platform) is to ease the selection of technology vendors for states, reduce the processes and costs involved in it.” That suggests that technology vendors will be selected for each state, in which case, what will the NSDL do?
Mobile? The rollout of a payment gateway is a logical step for enabling the rollout of e-governance services across the country. However, given the penetration of mobiles in the country, we do feel there is a need for enabling payments via mobile as well.