Digital payments in India have witnessed a sharp increment in transactions in the financial year 2022. In terms of volume, the transactions have grown up from 44 billion in the previous fiscal year to around 72 billion.
The reasons behind digital payments growth
- Rise in wholesale transactions behind digital payments comeback in transactional volume is the.
- Funds transferred via Real Time Gross Settlement (RTGS) facility which is highly used by businesses, have grown to 208 million (31%) by volume (as compared to an year-ago) and Rs.1,287 trillion (22%) by value as per RBI’s annual report.
- Increased consumption of goods and services following the relaxation of pandemic-led curbs has led to improved capacity utilization.
- Large value credit transfers have also contributed to the payment growth.
- On the other hand, retail payments rose to Rs. 524 trillion (26%) by value.
What Fintech Convergence Council has said about digital payments comeback
In relation to the digital payments comeback in FY 2022, Navin Surya, Chairman, Fintech Convergence Council, said:
“Wholesale payments segment, which was significantly impacted by Covid-19, has grown again. The retail payments, on the other hand, have continued to grow irrespective of the pandemic in both transactions and value.”
The council was established in 2018 and represents fintech firms and financial service providers.
What happened to retail payments during the pandemic?
The pandemic has led to a setback for wholesale digital transactions while the growth happened towards digital payments in general. Many individuals transacted digitally for the first time during lockdowns.
In the current scenario, UPI has contributed significantly to the retail payments along with other factors like a rebound in travel, opening of entertainment avenues, hotel bookings, and more. Other reasons behind the witnessed payment growth include improvement in payments infrastructure, RBI intervention, and awareness campaigns.