ONDC - the next UPI

Open Network for Digital Commerce (ONDC) is an initiative aiming at promoting open networks for all aspects of exchange of goods and services over digital or electronic networks. ONDC is to be based on open-sourced methodology, using open specifications and open network protocols independent of any specific platform.

The Centre launched Open Network for Digital Commerce (ONDC) in Delhi NCR, Bengaluru, Bhopal, Shillong and Coimbatore in a pilot phase in the month of April.

ONDC is a freely accessible government-backed platform that aims to democratise e-commerce by moving it from a platform-centric model to an open network for buying and selling of goods and services. ONDC is planned to be active in 75 locations by August, months after running pilots in seven cities.

The digital economy has been propelled by a pandemic, which has contributed to the Indian e-commerce sector's current hypergrowth. In order to avoid being infected during the pandemic, people were advised to conduct online transactions. Digital use increased along with the rise of online-only purchasing.

It is an initiative of the government to promote an open platform for all aspects of the exchange of goods and services through electronic networks. ONDC to become the next Unified Payments Interface (UPI), one of India's most successful digital products. Through this platform, consumers can potentially discover any seller, product or service by using any ONDC-compatible application or platform, thus increasing freedom of choice for consumers.

The open network concept extends beyond the retail sector, to any digital commerce domains including wholesale, mobility, food delivery, logistics, travel, urban services, etc. It is an opportunity for the startup entrepreneurs to take the UPI, a system that powers multiple bank accounts into a single mobile application, to the world in a "very big way".

With the usage of ONDC platform, consumers' freedom of choice will increase as a result of the platform's potential for enabling them to find any seller or service by utilising any ONDC-compatible platform or application. ONDC can support business owners engaged in e-commerce, B2B transactions, or direct consumer contact.

For instance, last week, ONDC and the National Bank for Agriculture and Rural Development (Nabard) jointly hosted the Nabard-ONDC Grand Challenge to enable e-commerce in agriculture. The ONDC protocol was designed to support online sales in industries where the sellers aren't held by a single private entity.

With the help of the ONDC network, anyone can build their own online store using the protocol. Going forward, ONDC is expected to digitise the entire value chain, standardise operations, promote inclusion of suppliers, derive efficiency in logistics and enhance value for consumers.

Dr. Deepak Kumar Sahu, President & CEO, VARINDIA