RBI: Digital Payment up 39.6% in September 2021

RBI: digital payment up 39.6% in September 2021

Why in news:

• Digital payment transactions reported a 39.6% year on year jump as of September 2021, as per the RBI’s latest index that measures the extent of digitization of payments.
• The newly constituted RBI’s digital payment index (RBI-DPI) stood at 304.06 during September 2021 as against 270.59 in March 2021 and 217.74 in September 2020.
• The RBI-DPI Index continues to demonstrate significant growth in adoption and deepening of digital payments across the country.

Important :

• Constructed with March 2018 as the base period — DPI score for March 2018 is set at 100 — the RBI-DPI was 173.49 in September 2019.
• Digital payments increased after Covid hit the nation in March 2020 and the government and the Reserve Bank of India (RBI) announced several measures to boost digital payments.
• The RBI-DPI comprises of 5 broad parameters that enable measurement of deepening and penetration of digital payments in the country over different time periods.

These parameters are –

• Payment Enablers (weight 25%)
• Payment Infrastructure – Demand-side factors (10%)
• Payment Infrastructure – Supply-side factors (15%)
• Payment Performance (45%)
• Consumer Centricity (5%)
• The Reserve Bank had announced construction of a composite Reserve Bank of India – Digital Payments Index (RBI-DPI) with March 2018 as base to capture the extent of digitisation of payments across the country. The index for September 2021 stands at 304.06 as against 270.59 for March 2021.
• The RBI-DPI Index continues to demonstrate significant growth in adoption and deepening of digital payments across the country.
• The index series since inception is as under:

Reason behind the increase in digital payment:

• Cheap internet data, high smartphone penetration and India’s biometric identity card fuelled the rapid scale up of online payment systems over mobile platforms, said the report.
• Currently, 250 banks are live UPI members, which means they allow interbank fund transfers using UPI.  There are over 50 UPI apps with, Phone Pe leading the space.

7 Amazing benefits of using electronic payments

Every business needs to maintain a higher cash flow for operating smoothly. That is why many businesses have started inclining towards accepting their payments electronically. Electronic payment systems can help businesses to save their time and money. With electronic payments, you can process your payments speedily.

The e-payment systems will also allow you to make cash applications instantly and let you reconcile your financial records with great accuracy. This will eliminate your accounting errors and help you to keep your records more clear. But the advantages of using an electronic solution for payments are not just limited to this, here are some essential benefits of electronic payments:

Benefits of digital payments :

1. Instant Payment
2. Higher payment security
3. Better customer convenience
4. Saves processing costs
5. Low risk of theft
6. Transparent
7. Contactless paymnents reduce health risk