Significant Growth In Infra Fuels RBI’s Digital Payments Index In March

SUMMARY

The digital payments index of the RBI jumped more than 13% YoY to 395.57 at the end of March 2023, compared to 349.30 in March last year

The index was driven by significant growth in payment infrastructure and payment performance across the country, the RBI said

Instituted in March 2018, the semi-annual index takes into account five broad parameters and estimates the penetration of digital payments in the country

The Reserve Bank of India (RBI) on Thursday (July 27) said that its digital payments index (DPI) jumped more than 13% year-on-year (YoY) to 395.57 at the end of March 2023.

In contrast, the metric stood at 349.30 in March last year. Similarly, the index inched up nearly 5% (4.79% to be precise) from 377.46 in September 2022. As per the RBI, the index measures the extent of digitisation of payments across the country.

The central bank attributed the uptick to greater adoption and establishment of digital payments infrastructure across the country.

“The RBI-DPI index has increased across all parameters driven by significant growth in payment infrastructure and payment performance across the country over the period,” said the RBI in a statement.

Instituted in March 2018, the semi-annual index takes into account five broad parameters, with different weightage to each, that estimate the penetration of digital payments in the country. These include payment enablers (25% weightage), demand-side factors related to payment infrastructure (10%), supply-side factors related to payment infrastructure (15%), payment performance (45%), and consumer centricity (5%).

The index points to the healthy growth of digital payments adoption in the country and has largely come on the back of the Unified Payments Interface (UPI). The state-backed project logged more than 933 Cr transactions worth INR 14.75 Lakh Cr in June 2023.

After its success in the country, the government has also been looking at the international expansion of the UPI. Just this month, the UPI formally forayed into France, while RBI and the Central Bank of the UAE signed an agreement to link the UPI with its UAE counterpart Instant Payment Platform (IPP).

Spurring the adoption have also been other modes of digital payments such as Immediate Payment Service (IMPS), Bharat Bill Payment System and National Electronic Toll Collection.

Meanwhile, the NPCI, which owns and operates the UPI, continues to further ramp up the offering and has set a target of achieving 1 Bn transactions a day over the next five years.

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