Lok Sabha Question No. 2783 (UNSTARRED), answered on 2022-08-03
Subject: Digital Transaction
Ministry: ELECTRONICS AND INFORMATION TECHNOLOGY
Asked by: Mitesh Rameshbhai (Bakabhai) Patel, Shardaben Anilbhai Patel

## GOVERNMENT OF INDIA

## MINISTRY OF ELECTRONICS AND INFORMATION TECHNOLOGY

## LOK SABHA

## UNSTARRED QUESTION NO. 2783

TO BE ANSWERED ON: 03.08.2022

## DIGITAL TRANSACTION

## 2783.   SHRI MITESH RAMESHBHAI PATEL (BAKABHAI): SHRIMATI SHARDABEN ANILBHAI PATEL:

Will the Minister of ELECTRONICS AND INFORMATION TECHNOLOGY be pleased to state:

- (a)  the details of digital transaction during  the last three years;;
- (b)  the details of the increase in the value of these digital transactions during the last three years; and
- (c)  the details of the benefits of increasing digital transactions?

## ANSWER

## MINISTER OF STATE FOR ELECTRONICS AND INFORMATION TECHNOLOGY (SHRI RAJEEV CHANDRASEKHAR)

- (a):  During the last three  years, digital payment transactions have registered unprecedented growth in India. Easy and convenient modes of digital payment, such as Bharat Interface for Money-Unified Payments Interface (BHIM-UPI), Immediate Payment Service (IMPS), prepaid  payment  instruments  (PPIs)  and  National  Electronic  Toll  Collection  (NETC)  system have  registered  substantial  growth  and  have  transformed  digital  payment  ecosystem  by increasing  person-to-person  (P2P)  as  well  as  person-to-merchant  (P2M)  payments.  At  the same time pre-existing payment modes such as debit cards, credit cards, National Electronic Funds Transfer (NEFT) and  Real-Time Gross  Settlement (RTGS) have also grown at a fast pace. BHIM-UPI  has emerged as the preferred payment mode of users. The total number of digital payment transactions undertaken during the last three financial years and the current financial year are as under:
- (b): The total value of digital payments during the last three financial year and in the current financial year is as under:

| Financial year (FY)                | Total number of digital transactions (in crore) #   |
|------------------------------------|-----------------------------------------------------|
| FY 2019-20                         | 4,572                                               |
| FY 2020-21                         | 5,554                                               |
| FY 2021-22                         | 8,840                                               |
| FY 2022-23 *(till 24 th July 2022) | 3,270                                               |

#  Note:  Digital  payment  modes  considered  are  BHIM-UPI,  IMPS,  NACH,  AePS, NETC, debit cards, credit cards, NEFT, RTGS, PPI and others.

* Provisional data

Source: RBI, NPCI and banks

| Financial year (FY)   | Total value of digital transactions (in lakh crore) #   |
|-----------------------|---------------------------------------------------------|

| FY2019-20   | 2,953   |
|-------------|---------|
| FY2020-21   | 3,000   |
| FY2021-22   | 3,021   |
| FY2022-23   | 566     |

#  Note:  Digital  payment  modes  considered  are  BHIM-UPI,  IMPS,  NACH,  AePS, NETC, debit cards, credit cards, NEFT, RTGS, PPI and others.

* Provisional data

Source: RBI, NPCI and Banks

- (c):  The  digital  payment  landscape  in  India  has  been  transformed.  Indian  consumers  have displayed  great  affinity  to  digital  technology,  leading  to  rapid  growth  in  digital  payment infrastructure. The benefits of using digital payments are as follows:
- (i) Instant  and  convenient  mode  of  payment :  Unlike  cash,  money  can  be instantaneously transferred to the beneficiary account using digital modes like BHIM-UPI and IMPS. Moreover, using the BHIM-UPI mode, one can effect a digital transaction via mobile phone using easy-to-remember email-like address, called virtual payment address.
- (ii) Increased  financial  inclusion :  Digital  payments  offer  anytime,  anywhere access to  accounts,  thus  making  it  easy  for  them  to  receive  payments  in  their accounts and to also make payments using their phone. People who may have been  deterred  by  the  time,  travelling  cost  and  opportunity  cost  involved  in physically accessing a bank outlet for transactions can now conveniently access the  same  digitally  by  using  an  account  and  in  the  process  getting  various benefits of being part of the banking system and becoming financially included.
- (iii) Increased acceptance during COVID-19 pandemic: The COVID-19 pandemic has brought out the benefit of digital payments in enabling healthcare. Contactless  modes  of  digital  payment  like  UPI  QR  code  and  Near  Field Communication (NFC) enabled cards enable observance of social distancing.
- (iv) Fostering  innovation  in  payments :  India's  indigenously  developed  BHIMUPI,  which  enables  digital  payments  using  mobile  apps,  is  directly  linked  to achieving  the  goals  of  universal  electronic  payments,  a  less-cash  society  and financial inclusion. BHIM-UPI utilises a set of standard Application Programming  Interfaces  (APIs)  to  facilitate  next  generation  online  real-time payments by leveraging trends such as increasing smartphone adoption, Indian language interfaces and universal access to Internet and data.
- (v) NETC  system: NETC  system  enables  the  customer  to  make  electronic payments at NETC-enabled toll plazas on the highway without stopping at the toll, using Radio Frequency Identification technology.
- (vi) Faster adoption of QR code technology : Post demonetisation, the acceptance infrastructure  for  QR  codes  has  seen  tremendous  growth.  As  a  result,  QR based payments are increasing rapidly. One can simply scan a QR code to pay for utility bills, fuel, grocery, food and travel as well as to merchants offering various other goods and services.
- (vii) Improved speed and timely delivery: In contrast to a cash payment that travels at  the  speed  of  its  carrier,  digital  payments  can  be  virtually  instantaneous, regardless of whether the sender and receiver are in the same town, district or country.
- (viii) Increased transparency in government system :  Earlier  cash  payments  were subject  to  'leakage'  (payments  that  do  not  reach  the  recipient  in  full)  and 'ghost' (fake) recipients, particularly in the context of social security benefits by  government  transfers.  Now,  benefits  are  directly  transferred  to target beneficiary (direct benefit transfer) account through digital modes of payments.
- (ix) Safe  and  secure :  Recipients  of  cash  payments  not  only  often  have  to  travel considerable  distances  to  receive  their  payments,  but  are  also  particularly vulnerable  to  theft,  digital  payments  across  India  are  very  secure  as  multiple levels of authentication are required for making transactions.
- (x) Bharat Bill Payment System: Bharat Bill Payment System (BBPS) provides an  interoperable  and  easily  accessible  recurring  and  bill  payment  service  to consumers via multiple channels like Internet banking, mobile banking, mobile apps, BHIM-UPI etc.
- (xi) Lending: Unlike cash  payments,  digital  payments  automatically  establish  a user's financial footprint, thereby increasing access to formal financial services, including credit. Banks  and  other lending institutions can utilise digital transaction  histories  to  take  cashflow-based  lending  decisions  for  both  retail lending  and  lending  to  businesses,  including  small  businesses  who  may  face difficulty in getting credit in the absence of verifiable cash flows.
- (xii) Promotion  of  Fintechs :  Fintechs  play  a  key  role  in  the  growth  of  digital transactions by enabling transparent, secure, swift and cost-effective mechanisms  benefiting  the  entire  digital  payments  ecosystem.  Fintechs  have transformed  the  digital  payments  ecosystem  by  increasing  P2P  and  P2M payments.

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