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India Moves To Leadership Position In Large Value, Fast Payment Systems: RBI Report
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India has made significant progress and moved to a leadership position in large-value digital payment systems, though it is still weak in certain parameters relating to ATMs and card payments, an RBI report said on Friday.
India was categorised as a 'leader' or 'strong' in respect of 25 (21 in the previous exercise) out of 40 indicators and categorised as 'weak' in respect of 8 (12 in the previous exercise) indicators, said the report on 'Benchmarking India's Payment Systems'.
The RBI report, released on Friday, the report provides a comparative position of the payments ecosystem in India relative to other major countries.
The benchmarking exercise was first carried out in 2019 with respect to the position in 2017. This follow-on benchmarking exercise, covering the same countries and parameters used in the earlier study, was undertaken with respect to the position in 2020.
"India has made significant progress and moved to a leadership position in large value payment systems and fast payment systems, which contributed to rapid growth in digital payments", the report said.
Since the last exercise, India has demonstrated improvement in digital payment options available for bill payments, ticketing systems for public transportation, available channels for cross-border remittances and decline in cheque usage.
The exercise highlights that there is scope for improvement in acceptance infrastructure i.e. ATMs and PoS terminals. The Payments Infrastructure Development Fund (PIDF) scheme was operationalised in 2021 to enhance the acceptance infrastructure and bridge the gap.
The decline in India’s rating in some parameters involving currency in circulation is explained by the increased demand for cash as a store of value during the Covid-19 pandemic related lockdown and the slowdown in economic growth during 2020.
The report said that the learnings from the benchmarking exercise are expected to facilitate further improvements in the payments landscape in India.
India’s domestic card network – RuPay – dominates the debit card segment as far as card issuance is concerned. However, RuPay is lagging in the credit card segment with below 3 per cent share of total cards issued, according to the report.
(With inputs from PTI)
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