Digital payments grew significantly at 13.24% in FY23, shows RBI index

In the fiscal year 2022-2023 (FY23), digital payments in India experienced remarkable growth, as indicated by the Reserve Bank of India (RBI) Digital Payments Index (RBI-DPI). The RBI-DPI, a comprehensive measure of payment digitization, displayed a substantial increase across all parameters during this period, driven by significant advancements in payment infrastructure and performance across the country. The index for March 2023 recorded a value of 395.58, marking a 13.24% growth compared to September 2022 (377.46), as announced on January 31, 2023.

RBI-DPI’s Growth Trajectory

The RBI-DPI began with a base index value of 100 in March 2018 and has been consistently rising ever since. It provides a reliable gauge of the extent of digital payment adoption in India and is updated semi-annually, with a four-month lag.

Key Parameters of RBI-DPI

The RBI-DPI encompasses five major parameters, each representing crucial aspects of the digitization of payments. These parameters are:

1. Payment Enablers: This parameter evaluates the factors that facilitate digital payment adoption, such as the availability of digital wallets, mobile banking services, and internet penetration.

2. Payment Infrastructure – Demand Side Factors: Focusing on the consumers’ end, this parameter examines the accessibility and ease of using digital payment platforms, including point-of-sale (POS) devices and payment gateways.
3. Payment Infrastructure – Supply Side Factors: This parameter assesses the robustness and efficiency of payment systems and infrastructure on the provider’s side, including banks and financial institutions.
4. Payment Performance: Evaluating the effectiveness of digital payment transactions, this parameter gauges factors like transaction success rates, transaction speed, and reliability.

5. Consumer Centricity: A crucial aspect of digital payments is user satisfaction. This parameter measures the overall experience and user-friendliness of digital payment platforms.

Historical RBI-DPI Figures

The RBI-DPI has shown steady growth over the years. In March 2022, the index recorded a value of 349.30, showcasing a significant increase from 270.59 in March 2021 and 304.06 in September 2021.

Impact of Unified Payments Interface (UPI)

The Unified Payments Interface (UPI) has played a pivotal role in driving the surge in digital payments in India. According to a recent report by PwC India, UPI transactions are projected to reach a staggering 1 billion transactions per day by 2026-27. In the retail segment, UPI transactions have accounted for approximately 75% of the total transaction volume during the FY22-23 period.

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