The Impact of Digitisation on Small to Medium Businesses in Bangalore, India

The Indian Stack, introduced by the Indian Government in 2010, is a set of five different digital components: UPI, Aadhar ID authentication, eSign, eKYC, and Digital Locker, designed to improve daily operations for Indian businesses. The advent of the pandemic necessitated a digital infrastructure for multiple Indian businesses. Studies have analyzed how larger companies have leveraged the Indian Stack to their benefit, but there is a lack of information on its impact on smaller businesses. This research aims to examine the impact of the Indian Stack on the operations and growth of SMBs (small to medium businesses) in Bangalore, India's IT hub. The study used a self-constructed survey conducted among 34 respondents, who are small and medium-sized business owners with work experience ranging from 1 to 10+ years with diverse demographics, ranging from street vendors to local tailors, and working within the three active commercial SMB locales in Bangalore: Indiranagar, Thippasandra, and Sarjapur. It was found that UPI (Unified Payments Interface) emerged as a breakthrough for these businesses in 2021-2023. UPI-enabled apps are applications powered by banks and other financial institutions that allow users to make payments and transfer funds using the UPI system irrespective of language, education, and number of years of business. This study reveals that in the post-pandemic era, despite increased capital, many SMBs continue to use UPI to a greater extent than other available digital tools. This prompts a need for policymakers and developers to consider revisions to ensure inclusivity and equitable support across all business sizes.