Digital payment modes gain momentum

The digital modes of payment gathered momentum in India during 2016-17, according to the RBI’s annual report.

The push to a less-cash society received an impetus by quick policy measures and initiatives by the RBI following the withdrawal of high-denomination specified bank notes on November 8, 2016.

The usage of credit and debit cards increased significantly during 2016-17. The number of credit card transactions increased to 1.08 billion (0.78 billion) valued at ₹3.28 lakh crore (₹2.40 lakh crore).

During 2016-17, the number of debit card transactions increased to 2.39 billion (1.17 billion) valued at ₹3.29 lakh crore (₹1.58 lakh crore).

The use of prepaid instruments (PPIs) saw a significant growth during the year. The number of PPI transactions increased to 1.96 billion in 2016-17 from 0.74 billion transactions in 2015-16. The value of transactions increased to ₹0.83 lakh crore (₹0.48 lakh crore) during the year.

The number of transactions under Real Time Gross Settlement (RTGS) stood at 108 million valued at around ₹982 lakh crore during 2016-17, against 98 million transactions valued at ₹825 lakh crore in 2015-16.

The number of transactions under National Electronic Funds Transfer (NEFT) increased to 1.6 billion transactions valued at ₹120 lakh crore during 2016-17, against 1.3 billion transactions valued at ₹83 lakh crore in the previous fiscal.

At the end of March, NEFT facility was available through 1.30 lakh branches of 172 banks, in addition to business correspondent (BC) outlets.

The annual report said that the mobile banking service witnessed strong growth of 151 per cent and 224 per cent in volume and value terms, respectively. The number of registered customers rose to 163 million (105 million) during the year.

The number of transactions under immediate payment service (IMPS) increased to 506 million (220 million) valued at ₹4.11 lakh crore (₹1.62 lakh crore) during 2016-17.

To promote digital transactions in the country, thrust was given to other measures as well. These included the launch of Unified Payments Interface (UPI) by the National Payments Corporation of India (NPCI).

The NPCI was allowed to launch the Bharat Interface for Money (BHIM) app, providing an additional interface to customers to connect to UPI besides banks’ own apps.

The NPCI was permitted to introduce the Unstructured Supplementary Service Data (USSD) 2.0 (*99#) version which was also integrated with the UPI, in order to provide a better customer experience for fund transfers.

To provide a channel for customers to make digital payments using their Aadhaar-seeded bank accounts at merchant locations, in-principle approval was accorded to the NPCI to launch a pilot on BHIM-Aadhaar Pay. BHIM-Aadhaar Pay is a smart phone-based application with a dongle attached to it for capture of customers’ biometric data.

The annual report also said that approval was given to the authorised card networks to introduce tokenised contact-less card payments such as Samsung Pay.