Shaktikanta Das: Digital payments awareness week celebrations
Address by Mr Shaktikanta Das, Governor of the Reserve Bank of India, at the Digital
Payments Awareness Week celebrations, Mumbai, 4 March 2024.
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It gives me immense pleasure to be here to celebrate the Digital Payments Awareness
Week organised by the Reserve Bank of India. Over the years, we have not only
navigated through the fast-evolving technological innovations but also played a pivotal
role, as a catalyst, in developing one of the most modern payment systems in the world,
be they large value, retail or fast payments. This has been made possible by nurturing
diverse payment systems in the country, namely, the bill payments, merchant
payments, vendor payments, transit payments, or recurring payments.
We have seen retail digital payments in India growing from 162 crore transactions in
FY2012-13 to over 14,726 crore transactions in 2023-24 (till February 2024) i.e.,
approximately 90-fold increase over 12 years. Today, India accounts for nearly 46% of
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the world's digital transactions (as per 2022 data) . The extraordinary growth in digital
payments is also evident in the Reserve Bank's Digital Payment Index, which has
witnessed a four-fold rise in the last five years.
The flagship of our payment systems, the 'UPI', has become the most talked about fast
payment system not only in India but across the world. It is the biggest contributor to the
growth of digital payments in India. The share of UPI in digital payments has reached
close to 80 per cent in 2023. At a macro level, the volume of UPI transactions increased
from 43 crore in CY-2017 to 11,761 crore in CY-2023. Apart from being a user-friendly
interface and facilitating QR code-based payments, the UPI has evolved to include
advanced functionalities such as offline payments through near field communication
(NFC) technology (UPI Lite X), payments through feature phones (UPI 123Pay), AI
based conversational payments (hello! UPI), etc.
It is also worth noting that progressively it has taken less time for reaching tipping point
of next 1000 crore transactions in UPI. While reaching the first 1000 crore UPI P2M
transactions, it took 1668 days (~4.56 years), the latest 1000 crore transactions took
just 45 days. Similarly, for UPI P2P transactions, while reaching the first 1000 crore UPI
P2P transactions took 1329 days (~3.63 years), the latest 1000 crore transactions took
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65 days or just over two months . The recent progress of the UPI has thus been
enormous. Currently, UPI is processing close to 42 crore transactions in a day
There is, however, considerable scope for expanding the use of digital payments in
India. Last year, we had embarked on a mission to make every person in India a user of
digital payments - "Har Payment Digital". It was aimed at reinforcing the ease and
convenience of digital payments and thereby facilitate onboarding of new consumers
into the digital fold. Since the start of the mission in March 2023, the number of new UPI
users added has been 6.65 crore between March 1, 2023 to January 31, 2024. The
Reserve Bank's Payments Infrastructure Development Fund (PIDF) has also further
aided this growth, with additional deployment of over 1.2 crore digital payment touch
points.
Trust in digital payments is built on the pillars of transparency, ease of use and above
all, security. Hence, reinforcing the notion of safety and security of the system is very
important. With today's message of - "Digital Payment, Safe Payment" - "Digital
Payment, Surakshit Payment", we are aiming to create awareness around safety and
security of Digital Payments. The goal is to reach out and empower every individual
with the knowledge and tools necessary to navigate this digital payments landscape
with confidence and ease.
Currently, the Reserve Bank, through its regional offices, conducts Electronic Banking
Awareness and Training (e-BAAT) programmes across the country. The main thrust of
e-BAAT programme comprises of:
1. Awareness about Digital Payment Products;
2. Awareness about Frauds and Risk Mitigation; and
3. Awareness about redress of grievances.
In addition, the Reserve Bank conducts 360-degree, multimedia and platform based
public awareness campaigns under the tag of 'RBI Says' or 'RBI Kehta Hai'. Going
forward, all the regional offices of the Reserve Bank will start regional campaigns to
develop marketplaces like vegetable markets / mandis and public transport
infrastructure like auto/ taxi drivers as digitally enabled clusters in their chosen areas.
Historically, the Reserve Bank has been a trendsetter in ensuring security of digital
payment transactions. We were one of the first countries to fully adopt additional factor
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of authentication (AFA). Since then a host of measures such as EMV Chip and PIN
based cards; transaction alerts; facility to switch on and off and set or modify
transaction limits for all types of transactions; tokenisation of cards; restrictions on
storage of actual card data; localisation of payments data etc., have been implemented
to enhance the security of digital payments.
All operators and participants of authorised payment systems are required to do
timebound resolution of failed transactions. Failure to do so may lead to payment of
compensation to the users. Similarly, we have also implemented a web-based
paymentrelated fraud reporting solution - Central Payments Fraud Information Registry (CPFIR)
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for reporting of all payments related frauds.
Internet Banking is one of the oldest modes for online merchant payment transactions.
It is a preferred channel for payments like income tax, insurance premium, mutual fund
payments, e-commerce, etc. At present, such transactions processed through Payment
Aggregators (PAs) are not interoperable, i.e., a bank is required to separately integrate
with each PA of different online merchants. As a result, if a customer wants to make
payment from his bank account to a certain merchant, the merchant's PA and
customer's bank must have an arrangement. Given the multiple number of payment
aggregators, it is difficult for each bank to integrate with each PA. Further, due to lack of
a payment system and a set of rules for these transactions, there are delays in actual
receipt of payments by merchants and settlement risks.
Keeping in view these bottlenecks, in our Payments Vision 2025, we had envisaged an
interoperable payment system for internet banking transactions. In pursuance of this
objective, we have given approval for implementing such an interoperable system to
NPCI Bharat BillPay Ltd (NBBL). We expect the launch of this interoperable payment
system for internet banking during the current calendar year. The new system will
facilitate quicker settlement of funds for merchants.
This measure will further boost the user confidence in Digital Payments. As a regulator,
we are committed to play our part in India's journey in digital payments. I urge all
stakeholders like industry, payment system operators, media, digital payment users,
and others to take up the responsibility of fulfilling the mission of 'Har Payment Digital'.
It is a mission not just for the Reserve Bank but for the entire country.
Thank You, Namaskar
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https://pib.gov.in/PressReleasePage.aspx?PRID=1973082
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Data analysed till December 31, 2023
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EMV is short for Europay, Mastercard and Visa: the three companies that created the
EMV standard.
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All payment-related frauds either reported by the customer to the issuer banks /
nonbank Prepaid Payment Instrument (PPI) issuers / non-bank Credit Card issuers
[together termed as Regulated Entities (REs)] or detected by the REs themselves, are
required to be reported to the CPFIR.