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Trends, Issues and Opportunities in Digital Payments

This topic provides information about Trends, Issues and Opportunities in Digital Payments published by NITI Aayog.


A booklet on Digital Payments was prepared by NITI Aayog and released in July 2017. The 2018 edition of the booklet is the second annual edition of the aforesaid booklet.

Primary objective of the booklet was to provide relevant data on the growth of digital payments so that policy makers can monitor the progress of digital payments in the country.

The booklet inter-alia dealt with legal definition of digital payments as provided under the Payment and Settlement Act, growth trends in digital payments and issues relating to charges and challenges for collecting and disseminating disaggregated data.

The summary of the booklet content is provided below.

Digital Payments – Definition

The Payment and Settlement Act, 2007 has defined Digital Payments. As per this any “electronic funds transfer” means any transfer of funds which is initiated by a person by way of instruction, authorization or order to a bank to debit or credit an account maintained with that bank through electronic means and includes point of sale transfers; automated teller machine transactions, direct deposits or withdrawal of funds, transfers initiated by telephone, internet and, card payment.

Summary Trends (2017-18)

  • Digital Payments have registered robust growth in 2017-18 both in volume and value terms.
  • In volume terms the growth during the year 2017-18 was much higher than the trend growth rate during the last five years (2011-16)
  • Growth in Total Retail Payments in value terms has been three times higher than the trend rate of the last five years.
  • The UPI and IMPS Segment in volume of transactions registered a spectacular growth during 2017-18. UPI, despite being new product in the payment segment has shown great adoption rate among consumer and merchants
  • Total Card Payments continued its growth momentum and exceeded the trend growth rate of the last five years both in volume and value terms

Key Drivers for Digital Payments

  • In the Volume segment, the key drivers of Digital Payments are Debit Cards, PPIs and IMPS. The volume of UPI segment is also increasing
  • In the Value segment, the key contributors of Digital Payments are RTGS and NEFT

Policy Initiatives

  • In the Union Budget 2017-18, major policy announcements were made by the Hon’ble Finance Minister for promoting Digital Payments.
  • Ministry of Finance has taken a major initiative in drafting a Bill for amendment of Payment and Settlement Systems Act, 2007, as envisaged in the Report of the Committee on Digital Payments 2016
  • RBI has taken four major policy initiatives.
    • National Electronic Funds Transfer (NEFT) system – Settlement at half-hourly intervals
    • Master Directions on Prepaid Payment Instruments (PPIs)
    • Rationalisation of Merchant Discount Rate
    • Storage of Payment System Data
    The impact of these initiatives on Digital Payments will be assessed in due course.


  • Digital Payments offer unique opportunities. The Global trends indicate heightened customer expectations for value-added services, increased competition due to the emergence of FinTechs, new technologies, and an ever-changing regulatory landscape
  • These emerging global trends is expected to impact the Indian Digital Payments ecosystem and provide impetus to the growth of Digital Payments.

Emerging Global Trends

  1. Alternate payment channels such as contactless and wearables gain acceptance
  2. Banks and FinTech’s explore distributed ledger technology to transform cross-border payments.
  3. Instant payments processing likely to become the ‘new normal’ for corporate treasurers, industry at large.
  4. As global cyberattacks rise, regulators focus on data-privacy law compliance.
  5. Infrastructure rationalization is likely as payments intermediaries come together or evolve .

To access the complete booklet, click here.

Source : NITI Aayog

T.Hari Jan 28, 2019 06:48 PM

I have a Problem with my ATM card,while online payments OTP is not coming to my mobile number

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