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In a notable surge reflective of a tech-driven financial landscape, India has witnessed an exponential rise in digital payment transactions. As per the Ministry of State for Finance’s recent statement in the Rajya Sabha, the volume of digital transactions has skyrocketed from 20.7 billion in FY 2017-18 to an impressive 134.6 billion in FY 2022-23, marking a staggering Compound Annual Growth Rate (CAGR) of 45%. As of the current financial year, until December 11, 2023, digital payment transactions have already reached an astonishing 116.6 billion.
Union Minister of State for Finance, Dr Bhagwat Kisanrao Karad, attributed this monumental growth to the concerted efforts of the Government in collaboration with various stakeholders, signalling a concerted drive towards a digitally inclusive financial ecosystem.
The minister underscored the diverse spectrum of digital payment products catering to both retail and wholesale transactions. For wholesale payments, the Real-Time Gross Settlement (RTGS) system prevails, while retail transactions find support in a range of cutting-edge products.
The platforms include Unified Payments Interface (UPI), National Electronic Fund Transfer (NEFT), Immediate Payment Service (IMPS), Credit and Debit cards, Prepaid Payment Instruments, National Automated Clearing House (NACH), Aadhaar-enabled Payment Service (AePS) for fund transfers, BHIM Aadhaar Pay, and National Electronic Toll Collection (NETC) linked to bank accounts.
Dr Karad emphasised the government’s steadfast commitment, in tandem with the Reserve Bank of India (RBI), toward enhancing the user experience in digital payments while prioritising security measures. Noteworthy efforts include the introduction of conversational payments in UPI, empowering users to engage in secure transactions through AI-powered systems within a safe environment.
Furthermore, innovations like offline payments in UPI have been deployed to expedite small-value transactions, amplifying the speed and convenience of digital payments. The expansion of e-RUPI vouchers’ scope and accessibility, the integration of RuPay Credit Cards with UPI, and the introduction of Interoperable Card-less Cash Withdrawal (ICCW) at ATMs underscore the ongoing commitment to fortify and expand the digital payments landscape.
This remarkable surge in digital transactions not only mirrors technological advancement but also underscores the nation’s pivotal shift towards a more inclusive and efficient financial ecosystem. As technology continues to evolve, India’s trajectory in digital payments promises a future characterised by convenience, accessibility, and fortified security measures.
The Government of India remains steadfast in its commitment to expand the footprint of digital transactions within the nation’s economic framework. This concerted effort aims not only to bolster the strength and quality of the financial sector but also to enhance the overall quality of life for its citizens. Notably, the exponential surge in digital payment transactions stands as a testament to these collective endeavours.
From a modest 2,071 crore transactions in FY 2017-18, the digital payment landscape has witnessed an extraordinary ascent, reaching 88.4 billion transactions in FY 2021-22, as reported by sources including the RBI, NPCI, and banks. This meteoric rise can be attributed to the synergistic collaboration between the government, stakeholders, and concerted efforts on various fronts.
Over the past five years, the introduction of user-friendly and convenient digital payment modes has catalysed a significant transformation within the digital payment ecosystem. These channels have not only facilitated substantial growth but have also fundamentally reshaped the landscape, fostering an increase in person-to-person (P2P) and person-to-merchant (P2M) transactions.
This exponential growth underscores a paradigm shift in the way transactions are conducted within the Indian economy. As these digital channels continue to evolve and expand, they promise not only enhanced convenience and accessibility for users but also pave the way for a more secure and robust financial ecosystem aligned with the government’s vision of a digitally empowered India.
