Digital Payments Spike by 13% in FY ’23: RBI

Digital payments across the country witnessed a jump of 13.24% in the financial year (FY) 2023, data from the Reserve Bank of India’s (RBI’s) index for digitisation of payments that measures the adoption of online transactions.

RBI’s Digital Payments Index (RBI-DPI) clocked 395.57 at end-March 2023, which was at 377.46 in September 2022 and 349.30 in March 2022. 

The RBI-DPI index has risen across all parameters, buoyed by dramatic growth in payment infrastructure and payment performance throughout the country during this period, stated the RBI.

In March 2018, the apex bank announced the construction of a composite RBI-DPI. The idea was to consider this as a base to consider the level of digitisation of payments throughout the country. 

The central bank constructed the DPI as part of the sixth bi-monthly monetary policy statement for FY 2019-20. This was done in a bid to capture the extent of digitisation of payments throughout the country. Typically, RBI-DPI is published on a semi-annual basis after a span of four months. 

The index consists of five broad parameters, which are payment enablers (weight 25%), payment infrastructure – demand-side factors (10%), payment infrastructure – supply-side factors (15%), payment performance (45%), and consumer-centricity (5%). Subsequently, every parameter comprises various measurable indicators. 

The base index for March 2018 stood at 100, which continued to witness a subsequent spike from thereon. 

On the other hand, a recent PricewaterhouseCoopers (PwC) India report mentions that Unified Payments Interface (UPI) transactions are likely to touch the 1 billion transactions per day mark by 2026-27. 

Significantly, UPI has been one of the reasons for pushing digital payments in the country. Launched in 2016, UPI accounts for about 75% of the total transaction volume in the retail segment during the phase of 2022-23. 

UPI has been instrumental in paving the way for a cashless economy and has been responsible for promoting seamless digital payments.

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