New Delhi: The crowded field of payment platforms, Paytm and GooglePay, will soon have more competition. The Reserve Bank of India (RBI) on Thursday proposed a new pre-paid instrument for payments up to ₹10,000 for buying goods and services.
The central bank has said the loading /reloading of such pre-paid instrument will be only from a bank account and used for making only digital payments such as bill payments, merchant payments, etc.
Such instruments can be issued on the basis of essential minimum details sourced from the customer. Instructions in this regard will be issued by end of this month, the RBI said.
India’s current digital payment system is dominated by government’s United Payment Interface (UPI) and the likes of GooglePay, Paytm, Mobikwik and payment apps of banks like HDFC Bank’s PayZapp and State Bank of India’s Yono. The country’s current digital payment environment is said to be amongst the most advanced in the world, better than many developed economies’ including the US.
According to CRISIL Research, digital payments in India, in terms of value, is expected to more than double to ₹4,055.0 trillion in FY24 from ₹1,630.0 trillion in FY19, translating into a five-year CAGR of 20%.
Regulatory initiatives including financial inclusion, Aadhaar, and the unveiling of the Unified Payments Interface have spurred growth digital payments. Introduced in 2016, UPI has been a crucial contributor to the Indian digital payments market. UPI facilitates instant fund transfer between two bank accounts on a mobile platform, without requiring any detail of the beneficiary’s bank account.
The total transactions of UPI jumped to 1.15 billion in October from 0.96 billion in September. About 5.35 billion UPI-based transactions were recorded in 2018-19 as compared to 915.2 million in 2017-18.