NEW DELHI: Bharat Interface for Money (BHIM) using Unified Payments Interface BHIM-UPI recorded a new high in September this year with over 700 crore transactions, to the tune of Rs 12 lakh crore, the highest ever since its inception in 2016.
As per the latest figures by National Payments Corporation of India (NPCI), in October, UPI processed 730 crore (7.3 billion) transactions, worth Rs 12.11 lakh crore, a record high in terms of value of transactions. The figures assume significance as it is indicative of the trend in the country that people are increasingly adopting digital modes of cashless payments as a preferred means of transactions, officials in the Ministry of Electronics and Information Technology (Meity), said.
According to Meity, the digital payment landscape in India has undergone a vast transformation. Indian consumers have displayed great affinity to digital technology, leading to rapid growth in digital payment infrastructure according to the ministry sources.
The figures stood at 678.8 crore (6.78 billion) transactions in September, with value of about Rs 11.16 lakh crore while August recorded 658.8 crore transactions, with value of Rs 10.73 lakh crore. July witnessed 6.28 billion transactions, worth Rs 10.63 lakh crore.
Digital payments have reached an inflexion point and are expected to triple to $10 trillion by 2026 from $3 trillion today according to a recent report. According to a joint report by the Boston Consulting Group and Phone Pe, as a result of this unprecedented growth, digital payments will constitute nearly 65% of all payments by 2026. This implies that 2 out of 3 transactions will be digital, the report estimates.
While digital payment adoption has been accelerated in India led by the UPI and fuelled by the COVID pandemic- there still is a lot that can be done to improve penetration. “One would be to expand merchant acceptance of digital payments by rapid deployment of low-cost QR codes and through integrated Point of sale solutions” says Bhaskar Chatterjee, VP Product Management, Ezetap – a tech firm providing smart payment solutions.
The Government of India has been taking several measures to encourage digital payments in the country. As part of the 'Digital India' campaign, it has been aiming to create a 'digitally empowered' economy that is 'Faceless, Paperless, Cashless'. There are various types and modes of digital payments. Some of these include the use of debit/credit cards, internet banking, mobile wallets, digital payment apps, Unified Payments Interface (UPI) service, Unstructured Supplementary Service Data (USSD), Bank prepaid cards, mobile banking, etc.
COVID-19 and several disruptions over the last couple of years had triggered the adoption of cashless transactions. Over the months starting from payments for monthly groceries to paying vegetable vendors digital payments have even eliminated some of the traditional practices of making payments through cheques or physical retail shopping. The trend which was witnessed post-demonetization slowly gained momentum as people slowly migrated towards digital payments.
Amidst accelerated growth, the sector has challenges ahead with increased traffic expected in the coming days. “We as a country are reasonably well prepared and ready to handle the future, especially now with the 5G roll which will transform India into a broad-band super highway. Some minor challenges may crop up along the way but broadly the ecosystem is ready and geared up to cope with the challenge,” says Avinash Godkhindi, CEO at Zaggle, a fintech firm.
The next level of digital adoption can be triggered by Disruptions and innovative products by Fintech firms. “This is already happening with the integration of payments and lending with the advent of BNPL (Buy now, pay later) enabling better access to credit to both merchant and end customer,” Chatterjee added.