Amid digital transactions’ continuous rise across the country, the Reserve Bank of India has come up with a ‘composite Digital Payments Index (DPI)’ to measure the extent of digitisation of payments in India. Announcing the development recently, the central bank said that the RBI-DPI consists of five key parameters that would capture “deepening and penetration of digital payments in the country over different time periods,” RBI said in a statement. The digital payments ecosystem is currently dominated by large technology players including Paytm, PhonePe, Google Pay, and recently launched WhatsApp Payments. India’s UPI payments had shot up 82 per cent in the current fiscal year’s Q2 along with a 99 per cent jump in value from the year-ago period, according to the Worldline India Digital Payments report.
The five parameters based on which RBI would measure the penetration of digital payments included payment enablers, payment infrastructure – demand-side factors, payment infrastructure – supply-side factors, payment performance, and consumer centricity. Each of these parameters also consisted of sub-parameters which, in turn, included various measurable indicators. The RBI-DPI index was set-up with March 2018 as the base period with the score set at 100. “The DPI for March 2019 and March 2020 work out to 153.47 and 207.84 respectively, indicating appreciable growth. Going forward, RBI-DPI shall be published on RBI’s website on a semi-annual basis from March 2021 onwards with a lag of 4 months,” RBI said.
The announcement by RBI came around a month after RBI announced measures to secure digital payment channels via the proposed Digital Payment Security Controls Directions. The central bank had also announced increasing the upper limit of contactless card payments from Rs 2,000 to Rs 5,000 from January 2021 along with making RTGS transactions available 24×7 in order to further boost digital payments. Digital payments in India had grown significantly from around 2.38 such transactions per capita in FY2014 to 22.42 transactions per capita in FY2019, as per Statista.