As per RBI, the five year graph of digital payment has seen a growth of 55% in the FY20. The Reserve Bank’s concerted efforts to shift to a non-/less-cash economy by promoting digital payments have started to pay rich dividends as the amount of such payments has skyrocketed over the past five years, the latest central bank data showed. Digital payment volumes increased at a compounded annual growth rate of 55.1 percent between 2015-16 and 2019-20-from 5.93 billion transactions in the year to March 2016 to 34.35 billion transactions in the year to March 2020. If we see the value there is an increase from Rs 920.38 trillion to Rs 1,623.05 trillion, clipping at a CAGR of 15.2%.
What do you understand by digital payments?
When payments are made without the exchange of cash is called digital payment. these payments are done through UPI transfers or other applications using mobile data or internet. This means that, for digital payments to take place, the sender of the payment must have a bank account, a form of online banking, a payment device and a means of transmission, which means that either he or she should have signed up with a provider or an intermediary, such as a bank or a service provider.
What is the future of digital payment?
Over the past few years, digital payments have grown enormously. The possibilities are limitless as more customers become tech savvy, particularly as we are only now tapping into the unparalleled potential of global smartphone penetration with 3.2 billion smartphone users in 2020 against a global population of approximately 7.7 billion, or 41.5 percent, according to Statista. Unsurprisingly, cards are still the preferred option for payments worldwide, surpassing physical cash, but with the industry expected to hit $1 trillion in 2020, mobile wallets are rapidly gaining mass popularity.
What is UPI?
The smartphone operates via the UPI or unified payment interface. You may either use USSD technology or smartphone applications. In this process, the fund is immediately transferred between the two accounts. Every day, the machine operates 24 x7. There is no fee for this payment as of now. You have to download one of the UPI apps to use the UPI payment form. Scores of UPI applications are available, such as Phonepe, Google Pay, SBI Pay, BHIM, etc.
In the beginning, you have to go through the process of registration. Your bank account gets connected using your mobile number in this process. You need to set a UPI PIN for the related bank account as well. For making a payment, this PIN is appropriate. UPI applications are a quicker way to send money through VPA or even IFSC and account number. But they’ve still got some drawbacks.