The Reserve Bank of India’s Digital Payments Index, a measure of the extent of digitisation of payments across the country, rose to 395.57 in March 2023 from 377.46 in September 2022 and 349.30 in March 2022.
“The RBI-DPI index has increased across all parameters driven by significant growth in payment infrastructure and payment performance across the country over the period,” the central bank said in a release.
The RBI introduced the composite Digital Payments Index (RBI-DPI) in January 2021 with March 2018 as the base, to capture digitisation of payments. The index has since been steadily rising, crossing the 300-point mark in September 2021.
The RBI-DPI comprises five parameters to measure the deepening and penetration of digital payments over different time periods. Of these parameters, payment enablers account for 25 per cent of the index, payment infrastructure – demand-side factors for 10 per cent, payment infrastructure – supply-side factors for 15 per cent, payment performance for 45 per cent, whereas consumer centricity holds five per cent weightage.
As per the Economic Survey 2022-23, India has the highest fintech adoption rate of 87 per cent among the public compared to the global average of 64 per cent. Further, India has gained the third place in digital payments, coming only after US and China.
It also said that UPI (Unified Payments Interface) transactions, have on average, grown 121 per cent in terms of value and 115 per cent in terms of volume between FY19 and FY22. In May 2023, UPI transactions had crossed the benchmark of 900 crore per month, with a record high of 941 crore transactions worth ₹14.89 lakh crore being processed.
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“The increase in RBI’s Digital Payments Index (RBI-DPI) highlights the remarkable surge in digital payment adoption in India, predominantly propelled by the success of UPI. With customers increasingly adopting digital payments, even for small-value transactions, the index underscores the need for form-factor agnostic accessibility to include the financially underserved within the formal financial system,” said Anand Kumar Bajaj, Founder, MD and CEO, PayNearby.