The adoption of digital modes of payments has grown multi-fold in India during the pandemic and Finance Minister Nirmala Sitharaman believes the country has been successful in democratising payments in the past few years.
In an exclusive interview with Network18’s Editor-In-Chief Rahul Joshi, the FM said, “During the pandemic, look at how Indian citizens have readily accepted digital payments as a medium through which they can run their daily lives.”
Sitharaman stressed the fact that Indians across the country have taken to digital payments regardless of geography, age, education or gender.
“We were also successful in being able to reach out to every eligible citizen during the pandemic when the prime minister wanted monies to be given to them to meet up with any exigency that might arise. When even developed economies were looking at people to go deliver checks on doorsteps, we didn’t do any of that, we had accounts that were receiving the money,” the FM said.
In the past year, India also unveiled the e-RUPI, a digital voucher under the National Payments Corporation of India (NPCI) in order to extend benefits to citizens. The e-RUPI is similar to a digital gift card, replacing physical vouchers. It can be used by private companies, government institutions and other service providers to extend benefits with the help of its partner banks.
Since the beginning of the pandemic, the Unified Payments Interface (UPI) has also seen a massive boost in usage and adoption. This is seen in the growth in monthly UPI transaction volumes from 124 crore transactions in March 2020 to over 460 crore transactions in January 2022.
Monthly transacted values have also seen a jump from Rs 2 lakh crore in March 2020 to Rs 8.31 lakh crore in the month gone by. With this growth, UPI has taken over 50 percent of retail digital transaction volumes in the country.
The FM said that this extent of adoption is a leap towards democratisation of online payments.
“India has shown great strides in the payment ecosystem, in democratising digital adoption. Now, this is a very big message which we definitely have to leverage when you are talking about India and the rest of the world,” she said.
The finance minister added that the thrust in the budget to encourage digital education, payments, and digitisation of other processes is a step ahead in the direction of leveraging the current digital adoption for further uses.
Further, Sitharaman said that the Indian digital ecosystem will evolve to a level where it can communicate with global digital ecosystems.
Payments have acted as the platform to bring Indians onto digital platforms and further adopt the usage of financial services through digital modes. Payments players and UPI market share leaders like PhonePe, Google Pay and Paytm Payments Bank have leveraged their payments user base to cross-sell various financial offerings such as credit, mutual funds, insurance, among others.
The huge scale of digital adoption in the country also drew investor interest as fintechs bagged $9.03 billion in investments in 2021 across 410 equity funding rounds, according to data by Traxcn. Payments topped the charts in attracting funds, with payment companies making up over $4.11 billion or 46 percent of the year’s fintech funding.
