Digital Payments in India Witness Robust Growth of 13.24 Percent in FY 2022-23
Digital payments in India have experienced a substantial surge, registering a growth rate of 13.24 percent in the fiscal year 2022-23, as reported by the Reserve Bank of India (RBI). The RBI's Digital Payments Index (RBI-DPI) reached 395.57 at the end of March 2023, indicating a significant rise from 377.46 in September 2022 and 349.30 in March 2022. This remarkable progress reflects the country's rapidly advancing digital landscape and its increasing reliance on online transactions.
 |
| According to RBI index, digital payments registered a growth of 13.24 percent in FY 2022-23 |
Role of Unified Payments Interface (UPI)
A crucial catalyst behind the remarkable growth of digital payments in India is the Unified Payments Interface (UPI). UPI has played a pivotal role in promoting a cashless economy by providing a seamless and convenient platform for peer-to-peer and peer-to-merchant transactions. According to a report by PwC India, UPI transactions are projected to reach a staggering 1 billion transactions per day by the year 2026-27, further affirming its significance in transforming India's payment ecosystem.
Contribution of Various Digital Payment Modes
In addition to UPI, other digital payment channels have also played a key role in driving the growth of online transactions. Immediate Payment Service (IMPS), Bharat Bill Payment System, National Electronic Toll Collection, and the Buy Now-Pay-Later (BNPL) model have collectively contributed to the increasing adoption of digital payments across various sectors.
Understanding the RBI's Digital Payments Index
The RBI introduced the Digital Payments Index (RBI-DPI) in March 2018 to gauge the extent of digitization in the country's payment landscape. The index comprises five broad parameters, including payment enabler, payment infrastructure (demand-side factor), payment infrastructure (supply-side factor), payment execution, and consumer centricity. The composite RBI-DPI data, with March 2018 as the base year, has been published semi-annually since January 2021, with a four-month lag.
Advantages of Digital Payments
The steady growth of digital payments in India brings several advantages to both consumers and businesses. Digital transactions offer convenience, speed, and security, reducing the dependency on cash transactions. Moreover, digital payments also promote financial inclusion, enabling even those without access to traditional banking services to participate in the formal economy.
Conclusion
The significant growth of digital payments in India, as evident from the RBI's Digital Payments Index, signifies the country's successful transition towards a digital-first economy. The widespread adoption of digital payment modes like UPI, IMPS, and others showcases the growing acceptance and trust in online transactions. As India continues to embrace technology and digitalization, the trajectory of digital payments is poised for further expansion, fostering financial inclusion and propelling the nation towards a cashless future.
FAQs
1. What was the growth rate of digital payments in India in FY 2022-23?
Digital payments in India witnessed a growth rate of 13.24 percent in FY 2022-23, as reported by the RBI.
2. Which payment mode played a significant role in promoting digital payments in India?
The Unified Payments Interface (UPI) played a crucial role in driving the growth of digital payments in India.
3. What are the parameters included in the RBI's Digital Payments Index (RBI-DPI)?
The RBI-DPI includes five broad parameters, namely payment enabler, payment infrastructure (demand-side factor), payment infrastructure (supply-side factor), payment execution, and consumer centricity.
4. What other digital payment modes contributed to the growth of online transactions?
Apart from UPI, other digital payment modes like Immediate Payment Service (IMPS), Bharat Bill Payment System, National Electronic Toll Collection, and Buy Now-Pay-Later (BNPL) model have also contributed to the rise in digital transactions.
5. What advantages do digital payments offer to consumers and businesses?
Digital payments provide convenience, speed, and security to consumers while reducing dependency on cash. For businesses, it streamlines payment processes and promotes financial inclusion by enabling broader participation in the formal economy.
