Digital transactions cross 1 billion mark in December
Digital transactions rose 6.05% to 1.06 billion in December from 997.1 million in November, according to RBI’s provisional data
New Delhi: Digital transactions in December reached a new peak in terms of volume since the government’s demonetisation exercise in November 2016.
Transactions through digital means rose 6.05% to 1.06 billion in December from 997.1 million in November, according to provisional data released late on Tuesday by the Reserve Bank of India (RBI). This is the first time that the transaction volume has crossed the 1 billion mark.
The overall value of these transactions was also the second highest in a month in the last one year. Transactions worth about Rs125.51 trillion were carried out in December through credit and debit cards, the unified payments interface (UPI), unstructured supplementary service data (USSD), prepaid payment instruments (PPIs) and internet banking. The highest was in March at Rs149.59 trillion.
Transactions across UPI yet again reached a new peak in December. The transaction volume was 145.5 million, up around 40% from 104.8 million in the previous month. The value of transactions rose around 36% to Rs131.4 billion in December from Rs96.4 billion in the previous month. In the last one year, the UPI transaction volume has risen by more than 7000%, according to RBI data. Last December (in 2016), only around 2 million transactions were recorded.
UPI is a payments system launched by National Payments Corp. of India (NPCI) that facilitates instant fund transfer between two bank accounts on a mobile platform, without requiring any details of the beneficiary’s bank account.
“UPI BHIM touches 145 million in December 2017. With all the action happening, it should reach 1 billion/month in December 2018,” Infosys Ltd co-founder and chairman Nandan Nilekani tweeted on Monday.
Transactions through UPI received a major stimulus from the government after Prime Minister Narendra Modi launched the Bhim (Bharat Interface for Money) app on 30 December 2016.
Until now, there have been more than 21.65 million downloads of the Bhim app on the Android platform and around 1.03 million downloads on the iOS platform. According to NPCI, around 9 million transactions took place on the Bhim app in December.
Usage of PPIs such as mobile wallets peaked in terms of both volume and value during December. The volume of PPI transactions in December was 99.1 million as compared with 96.2 million in October. Rs35.1 billion worth of transactions were recorded in December compared with Rs32.7billion in October. The provisional data considers transactions of PPIs issued by eight non-bank issuers for goods and services transactions only.
Debit and credit card usage at point-of-sale (PoS) machines rose both in terms of value and volume. The volume of transactions increased by around 5% in December to 257.2 million transactions from 244.6 million transactions in the previous month. The value of transactions went up by 6.7% to Rs515.9 billion in December from Rs483.3 billion in the previous month. Card transactions of four banks have been considered by RBI.
Payments using National Electronic Funds Transfer (NEFT) and Real Time Gross Settlement (RTGS) increased by around 4% and 1%, respectively, in December from the preceding month.
The government has been pushing to popularize digital payments. Last month, the government announced that the merchant discount rate (MDR) applicable on transactions made through debit cards, BHIM UPI and Aadhaar-enabled payments system (AEPS) up to and including a value of Rs2,000 will be borne by it for a period of two years with effect from 1 January. Such steps can be seen as building blocks to fulfil the government’s aim to grow India’s digital economy to $1 trillion by 2022.
Editor's Picks »
- Why Tata Motors’ Project Charge at JLR is failing to recharge its shares
- Outlook on global profit growth worst since 2008 financial crisis
- Q3 results: ICICI Securities loses its retail broking crown
- High drug approvals to keep up pricing pressure for pharma firms
- Roads sector: Toll collections set to surge, but risks loom for developers