Post demonetisation in India, an effort that was initiated to curb the flow of black money; digital transactions have substantially gained prominence in India.
According to a recent report by the National Payments Corporation of India (NPCI), electronic payments or digital transactions have crossed 1 billion during July this year. The organisation that takes care of all the electronic payment systems in India produced figures that reflect a huge surge in cashless transactions after the initial shock of demonetisation gradually faded.
AP Hota, the Managing Director of NPCI said that the 1 billion transactions came under various types of payments including IMPS (immediate payment system), UPI (unified payment interface), POS, BHIM, RuPay, e-commerce and Aadhar based transactions among the 12 payment models monitored and operated by the NPCI.
“Highest growth has been seen in the mobile payments and Aadhaar based payments. This change was achieved by way of adding new products to NPCI’s portfolio and widening the membership of all products. The next logical target can be a billion transactions a day may be in 3 years,” he added.
“NPCI has truly emerged as the powerhouse of all financial transactions in India and has joined the leagues of reputed payment institutions which process billions of transactions every month globally,” Hota added.
— NPCI (@NPCI_NPCI) August 3, 2017
Scepticism dips as hope evolve
While most of the economists in India was doubtful about how a country with such a wide spectrum of a population would react to a new form of transaction, this figure comes as a welcome note for those who initiated the move. While a few thought that the circulation of currency bills will again bring people to cash transactions, provisional data from the RBI also shows that after falling in January and February, the value of electronic transactions still remains elevated at much higher levels than the pre-demonetisation period.
An evident rise in e-payments during March, mostly due to last-minute tax collections and payment rush towards various income tax-saving instruments gathered momentum and the trend continues.
The digital payments committee chairman, Ratan Watal, reported that digital payments recorded a 55 pc increase in 2016-17 and the trend is likely to continue in the coming years. “Due to innovations in digital payment technologies and increasing consumer satisfaction, the growth trends in digital payments are positive and will continue to dominate the payments landscape in India,” said Watal.
This also reflects that people are doing with less hard cash in the day to day transactions. The government has been promoting a less cash economy through a greater push on digital payments. Retail payments accounted for as much as 98-99 pc of the total volumes as consumers see the convenience in cashless transactions.
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