DIGITAL TRANSACTIONS IN INDIA

June 17, 2019

According to a Reserve Bank of India (RBI) report, Digital transactions in India are set to rise four times by 2021.

Key findings of the report:

  • India’s push to build a less-cash economy seems to be gathering momentum.

  • Total digital transactions in volume terms recorded a growth rate of 58.8 % during 2018-19, on top of a growth of 50.4 % during 2017-18.

  • The number of digital transactions is expected to increase more than four times from Rs 2,069 crore in December 2018 to Rs 8,707 crore in December 2021.

  • Though the bulk of digital transactions in value terms (82.8 %) are accounted for by RTGS transactions, retail component of digital transactions (excluding RTGS customers and interbank transactions) witnessed a volume growth of 59.3 % during 2018-19.

Recent innovations in payment and settlement system:

  • The payment and settlement landscape has witnessed unprecedented waves of innovation.

  • Mobile wallets have literally made banking services available ‘on tap’; digital-only banks have done away with the need for brick and mortar presence.

  • Biometric authentication has made doing transactions much safer and more convenient than the conventional modes of payment.

  • Blockchain may be a potentially disruptive technology but it is automating and decentralising financial transactions.

  • Artificial Intelligence (AI) is being employed in financial technology (fintech) industry in the form of automated data analysis, chatbots and robo-advisers.

  • Near field communication (NFC) technology and central bank digital currencies (CBDCs) are other path-breaking innovations that have emerged into the payment and settlement landscape.