Digital payments record 29% annual growth at March-end 2022: RBI data

The newly constituted RBI's digital payment index (RBI-DPI) stood at 349.3 in March 2022 as against 304.06 in September 2021 and 270.59 in March 2021

The Reserve Bank of India’s (RBI) digital payments index (DPI) rose to 349.30 as of March 2022, as against 304.06 in September 2021, thus reflecting the rapid adoption of digital payments in the country.

Launched in January 2021, the DPI index indicates the extent of digitisation of payments across the country.

“The RBI-DPI index has demonstrated significant growth representing the rapid adoption and deepening of digital payments across the country in recent years," the central bank said in a statement.

The RBI-DPI has been constructed with March 2018 as the base period, i.e. DPI score for March 2018 is set at 100.

In March 2019, the index stood at 153.47. and by September 2019 it rose to 173.49, followed by 207.94 in March 2020, 217.74 in September 2020, and 270.59 in March 2021.

RBI has said the index will be published on a semi-annual basis with a lag of 4 months.

The DPI index comprises five broad parameters that enable the measurement of deepening and penetration of digital payments in the country over different time periods. The parameters include payment enablers, with a weightage of 25 per cent in the index, followed by demand-side and supply-side payment infrastructure factors, with a weightage of 10 per cent each, payment performance, with 45 per cent weightage, and consumer centricity, with 5 per cent weightage. Each of the parameters have sub-parameters which, in turn, consist of various measurable indicators.

Digital payments have grown in leaps and bounds in the last two years, owing to the pandemic. 

Among the digital modes of payments, the number of transactions using Real Time Gross Settlement (RTGS) increased by 30.5 per cent during 2021-22. In terms of value, RTGS transactions registered an increase of 21.8 per cent; transactions through the National Electronic Funds Transfer (NEFT) system also witnessed an increase of 30.6 per cent and 14.3 per cent in volume and value, respectively, reflective of the increase in large value corporate transactions, in line with rising economic activity, RBI’s annual report said.

Payment transactions carried out through credit cards increased by 27 per cent and 54.3 per cent in terms of volume and value, respectively and transactions through debit cards decreased by 1.9 per cent in terms of volume, though in terms of value, it increased by 10.4 per cent.

Prepaid Payment Instruments (PPIs) recorded an increase in volume and value terms by 32.3 per cent and 48.5 per cent, respectively. In FY22, UPI processed more than 46 billion transactions amounting to over Rs 84.17 trillion, thus breaching the $1 trillion-mark. And, in FY21, it had processed 22.28 billion transactions, amounting to Rs 41.03 trillion. So, both volume and value of transactions doubled in a year’s time, indicating the meteoric rise seen in the adoption of digital payments, especially UPI, in the country.