Reasons for the Increase in Digitisation
- The Covid-19 period accelerated Digital Payments in the country; it was established as a safe payment mode during the pandemic.
- Many apps and payment mode technology leaped into the market, like Paypal, Amazon, Apple, Alibaba, Google, Paytm, and various other FinTech that has leveraged customersā payment convenience to capture the newly flourishing Digital market.
- According to PhonePe and Boston Consulting Group (BCG) report, Indiaās digital payments market is expected to grow more than threefold from $3 trillion to $10 trillion by 2026. Thus, going by this report, two out of every three payment transactions is likely to be digital payment by 2026.
- Consumer convenience, awareness of scanning QR codes, and internet accessibility even in unexplored interior regions will fetch the next level of growth in the Digital payment market.
RBI ā Digital Payments Index
The digitization of the market generated the need for online payment and banking transactions. The onset of digital payment fulfilled the need for a convenient payment method both for the customer and the retailer. In a country of 1.39 billion people, around 71 billion digital payments were recorded in 2022. Estimating the future growth of digital payment, RBI formulated a collective Digital Payment Index (RBI-DPI) in 2018. In order to gauge the extent of digital payments taking place across India. Multiple parameters have been considered to evaluate digital payment modes to construct the Digital payment Index. During Covid-19 Pandemic 2019, there was a significant rise in the RBI-DPI index, indicating the surge of Digital payments in the country.
The Digital Payment Index (DPI), released in September 2021, shows an increase of 39.64% as 304.06 DPI against 217.59 in the same month. As per the index for March 2022, DPI is at 349.30 from 304.06 for September 2021.
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