For financial year 2018-19, the Ministry of Electronics and Information Technology (MeitY) gave banks a target of processing 30 Bn digital transactions. The results are now out as the MeitY shared that Airtel Payments Bank and FINO Payments Bank have led the target with over 200% achievement of their targets.
In a summary of performance of 56 banks in India, the results showed that Airtel Payments Bank achieved 211.66% of its digital transactions target. This was followed by FINO Payments Bank and Paytm Payments Bank which overshot their targets by 209.31% and 122.95% respectively.
Even though, only Paytm Payments Bank and Airtel Payments Bank made it to top10 ranks which was evaluated on the basis of volume of transactions, number of terminals for Aadhaar based merchant payments deployed by them and the average success rate of transactions.
A Payments Bank can accept deposits of up to INR 1 lakh ($1,433), offer remittance services, mobile payments or transfers or purchases and other banking services like ATM/debit cards, net banking and third party fund transfers but cannot advance loans or issue credit cards.
Initially in the 2017-18 budget, India’s finance minister Arun Jaitley had set the goal of 25 Bn digital transactions in the country. This was followed by the MeitY’s 2018 letter to the banks which had aimed for 30 Bn digital transactions in the country by the end of FY 2019. However, neither of these targets were met.
For FY20, the MeitY has set up a target of 40 Bn digital transactions, a 33% hike from FY19. Paytm has been given a target of 5 Bn transactions through its payments bank and mobile wallet by MeitY. SBI is expected to reap in the highest— 7.7 Bn transactions. This seems suitable as it is the largest public bank of the country. Notably, top private banks of the country— HDFC Bank and ICICI Bank— are expected to chip in with about 2.5 Bn and 2.8 Bn transactions respectively.
According to NITI Aayog’s, India’s digital payments industry is estimated to grow to $1 Tn by 2023. Further, the value of digital payments is likely to jump from the current 10% to money transactions to over 25% by 2023.