The number of digital transactions in India in this financial year (FY) is at a historic high, zooming past the last fiscal’s figure with still three months to go. But the total value of these transactions shows a dip.
The latest government data reveals that 9,192 crore digital transactions have been done in the country in this financial year till December 31, 2022. This is higher than the entire 2021-22 when 8,840 crore digital transactions were done in the country, and a nearly 400 per cent increase from 2,071 crore digital transactions in 2017-18. BHIM UPI has emerged as the preferred digital payment mode of citizens in 2022-23.
The total value of digital transactions in India in 2022-23 stands at Rs 2,050 lakh crore till December 2022, which is apparently a dip from digital transactions worth Rs 3,021 lakh crore in the entire 2021-22 and Rs 3,000 lakh crore in 2020-21. These include all digital transactions through BHIM UPI, debit and credit cards, NEFT, RTGS, Immediate Payment Service (IMPS), and National Electronic Toll Collection.
The government says that the growth of digital payments in India and the availability of various easy and convenient digital payment solutions have facilitated ease of living for citizens, financial inclusion, and the growth of business and the economy. During the Covid pandemic, the availability of contactless digital payment solutions such as BHIM UPI facilitated social distancing and continuity of businesses, including small merchants.
Listing benefits of using digital payments, the government says that, unlike cash, money can be instantaneously transferred to the beneficiary account using digital modes like BHIM UPI and IMPS and one can effect a digital transaction via mobile phone using a mobile number or easy-to-remember virtual payment address. Digital payments offer anytime, anywhere access to accounts, thus making it easy for citizens to receive payments in their accounts and to also make payments using their phones, the government has said.
In contrast to a cash payment that travels at the speed of its carrier, digital payments can be virtually instantaneous, regardless of whether the sender and receiver are in the same town, district, or country. Citizens can also make easy bill payments anytime, anywhere.
Unlike cash payments, digital payments automatically establish a user’s financial footprint, thereby increasing access to formal financial services, including credit. Banks and other lending institutions can utilise digital transaction histories to make cash flow-based lending decisions for both retail lending and lending to businesses, including small businesses who may face difficulty in getting credit, the government says.
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