The recent data from the Reserve Bank of India (RBI) highlights a significant shift in the Indian financial landscape, with digital payments showing robust growth while cash transactions are on the decline. This transition is evident in the numbers presented in the RBI’s Digital Payments Index (RBI-DPI), which provides a comprehensive overview of the adoption of digital payments in India.
As of March 2023, the RBI-DPI stood at 395.58, marking a substantial increase from 377.46 in September 2022 and 349.30 in March 2022. This growth represents a year-on-year increase of 13.24% in digital payments. The RBI-DPI is a composite index that measures the extent of digitization of payments across the country. It includes various parameters such as payment enablers, payment infrastructure (both demand and supply side factors), payment performance, and consumer centricity, each consisting of measurable indicators.
The base index was set at 100 in March 2018 and has shown a continuous increase since then. For context, the RBI-DPI was 270.59 in March 2021 and 304.06 in September 2021. This steady rise indicates a growing preference for digital transactions over traditional cash dealings among Indian consumers and businesses.
One of the key drivers of this digital payment surge is the Unified Payments Interface (UPI), which accounts for approximately 75% of the total transaction volume in the retail segment during 2022-23. UPI transactions are expected to reach 1 billion transactions per day by 2026-27, underscoring its pivotal role in India’s digital payment ecosystem.
In summary, the RBI’s latest data paints a clear picture of the changing dynamics in India’s payment landscape. The significant growth in the RBI-DPI is indicative of the country’s rapid shift towards a digital-first economy, driven by advancements in payment infrastructure and a strong consumer preference for digital payment methods.