Digital payments in India see 78% rise in 2020 as nation heads towards cashless economy

On Monday, August 9, Union Minister of State for FinancePankaj Chaudhary in a written reply to a question in Lok Sabha has informed that it is the policy of the Government to move towards a less-cash economy and a digital payment ecosystem. 

As per the weekly statistical supplement of the Reserve Bank of India (RBI), the Minister provided details and stated that the Notes in Circulation (NIC) were Rs 17,74,187 crore as of November 4, 2016, and Rs 27,80,045 crore as of January 29, 2021.

Referring to the digital payment ecosystem, the Minister informed that the total volumes of digital payments have also increased from 1459.02 crore in FY 2017-18 to 4371.18 crore in FY 2020-21 due to sustained efforts towards digitalization.

The Minister further added that the quantum of banknotes in the economy broadly depends on the requirement for meeting the demand for banknotes due to GDP growth, inflation, and replacement of soiled banknotes and growth in non-cash modes of payment.

Future of Digital Payments in India

According to Razorpay, digital payment transactions have grown up to 76% for the past 12 months with several first-time digital payment users. As per reports, the Indian digital payments industry is estimated to grow up to US$700 billion by 2022. In the future, the fintech industry will innovate more dynamic providing safe transaction facilities to develop and promote the digital payment landscape in the country. The country is already advancing in terms of blockchain technology, cloud-based payments, cryptocurrencies, and other payment facilities powered by AI, ML, and IoT. 

Though India’s digital payments market witnessed exceptional growth over the past years after the demonetization in 2016, the COVID-19 pandemic has also fueled the growth and adoption of online transactions. Users have shifted to net banking and other digital payment facilities to avail products including essential goods, groceries, retail, medical supplies, education, and others. On the other hand, the emergence of improved technologies is one of the key factors leading to the growth of the digital payments industry in the country.

PM Modi launches e-RUPI

On August 2, Prime Minister Narendra Modi launched e-RUPI, a futuristic person and purpose-specific digital payment solution, via video link. e-RUPI is a cashless and contactless instrument for digital payment. It is a QR code or SMS string-based e-Voucher, which is delivered to the mobile of the beneficiaries. The users of this seamless one-time payment mechanism will be able to redeem the voucher without a card, digital payments app, or internet banking access, at the service provider. 

(With PIB input)

(Image credit: UNSPLASH/REPREENTATIVEIMAGE)