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Indian digital payments platform cross $20 billion

Data from the National Payment Corporation of India (NPCI) show that in April this year, the government-owned Unified Payments Interface (UPI) has recorded 781 million transactions. The value of these transactions was IN ₹142,034 crores (approximately US $20.4 billion).

Launched in 2016, UPI is an instant real-time payment system developed by NCPI that facilitates inter-bank transactions. The Reserve Bank of India (RBI) regulates the interface and it works by instantly transferring funds between two bank accounts on a mobile platform.

NPCI is an umbrella organisation for retail payments in the country. It is an initiative set up under the RBI and the Indian Banks Association (IBA).

UPI transaction volumes witnessed a 2.2% decline to 781 million in April compared with March, which was at a record high of 799 million transactions, a significant jump from the 93,000 transactions when it was first introduced.

In April this year, the number of Bharat Interface for Money (BHIM)-based UPI transactions grew a little over 1% every month to reach 15 million, which was worth IN ₹6,583.58 crores (approximately US $952 million).

Inter-bank electronic funds transfer system (IMPS) amounted to IN ₹169,197 crores (US $24.3 billion) for 185 million transactions. April transaction counted for 30 days with a daily average rate of transactions at 6 million.

AePS (Aadhar-enabled Point of Sale) recorded 219 million transactions worth IN ₹9,351 crores (approximately US $1.3 billion). National Electronic Toll Collection (NETC) reached 25 million transactions worth IN ₹585 crores (US $84 million).

On a year-by-year basis, UPI-based payments witnessed a 4.1 time, or 311%, increase. Currently, 144 banks are live on UPI, compared with 21 banks in 2016. Also, UPI allows peer-to-peer money collect requests that can be scheduled and paid as per requirement and convenience.

Digital payment platforms witness their greatest increase when the government announced demonetisation in November 2016 and removed IN ₹1,000 and IN ₹500 currency notes. India’s monthly digital transactions volume had increased three times to two billion in November 2018 from 736 million transactions in October 2016.

The government has been working to develop and support digital payment methods in the country. In fact, the NCIP is looking to use blockchain technology to make digital payments more robust and efficient.

It plans to develop a resilient, real-time, and highly scalable blockchain solution for digital payments, which have grown exponentially over the last few years. It is proposed to develop this solution using an open-source technology framework.

The implementation of blockchain technology will reduce dependency on a central engine operating the payment infrastructure. Also, immutable databases promise more efficiency and security, which reduces frauds. Blockchain technology stores information about transactions between users in a way that can be tracked by any user at any time, which ensures maximum transparency.

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