SUMMARY
During this period, the value has grown from INR 920.38 lakh Cr to INR 1,623.05 lakh Cr
FY20 witnessed a massive surge in volumes over the previous year to 3,434.56 Cr
In January 2020, RBI governor Shaktikanta Das had claimed that digital payments account for around 97% of daily payment system transactions in terms of volume
The government’s drive towards cashless economy bore fruit as digital payments across India increased at a compound annual growth rate (CAGR) of 55.1% over the past five years, i.e., between the financial years (FY) 2015-16 and 2019-20, the Reserve Bank of India (RBI) data has revealed.
During this period, its value has grown from INR 920.38 lakh Cr to INR 1,623.05 lakh Cr, clipping at an annual compounded rate of 15.2%.
Between 2015-16 and 2019-20, digital payments have grown at a compounded annual growth rate of 55.1% – from 593.61 Cr in the year to March 2016 to 3,434.56 Cr in the year to March 2020. FY20 witnessed a massive surge in volumes over the previous year to 3,434.56 Cr but in value slipped down to INR 1,623.05 lakh Cr.
In 2016-17 digital payments surged to INR 969.12 Cr from INR 593.61 Cr in the previous year in volume terms, while in value it rose to INR 1,120.99 lakh Cr.
In 2017-18, the volume grew to 1,459.01 Cr and value jumped to INR 1,369.86 lakh Cr.
While in 2018-19, the numbers clipped at a faster pace with volume jumping to 2,343.40 Cr transactions while the value rose to INR 1,638.52 lakh Cr.
In January 2020, RBI governor Shaktikanta Das had claimed that digital payments account for around 97% of daily payment system transactions in terms of volume. “This has been made possible with the accelerated growth of over 50% in the volume of digital payment transactions in the last five years,” he added.
Surge Of UPI Transactions
UPI transactions have seen an uptick amid pandemic. The NPCI announced that INR 3,29,027 Cr was transferred through 1.80 Bn UPI transactions in September 2020. This is a 10.3% hike compared to August, when NPCI recorded 1.61 Bn UPI transactions for INR 2,98,307 Cr.
Launched in August 2016 by the RBI in conjunction with the National Payments Corporation of India (NPCI), the United Payments Interface was designed to help simplify peer-to-peer transactions. At that time, it was announced that UPI was adopted by 29 banks. Currently, there are 71 banks that allow transactions via UPI.
UPI is a one-touch transaction for transferring money between any two parties using a ‘unique virtual address’ on a smartphone. The UPI-driven payments follow the IMPS (Immediate Payment Service) structure of payments. Since its launch, the technology has been adopted by various banks and other private fintech companies.
Spike In Digital Payments
A Redseer report has revealed that as the Indian economy rebounds after the Covid-19 lockdown, there will be a consequent growth in digital payments, which are expected to grow 2x and touch $60 Tn by 2022.
As per the data revealed by the Reserve Bank of India (RBI) on September 15, a total of 1.66 Bn transactions worth INR 5.99 lakh Cr were done via mobile-based banking and payment application in June which has increased from the transactions that happened in February.
