Mumbai: RBI Governor Shaktikanta Das said the payment system was seen as an economic lifeline and is now recognized as a means to achieve financial inclusion and ensure that the benefits of reaching the bottom of the pyramid.
According to the governor, financial inclusion will continue to be a priority to ensure that post-pandemic recovery is more inclusive and sustainable.
The governor’s statement came a day after the central bank imposed restrictions on MasterCard, quoting non-compliance with the norms on data localization.
Submitting the initial address of the Financial Inclusion Summit of the Economic Times, the DAS said, “It is quite famous now that India is among the leaders in the world about the development of advanced payment infrastructure and products that lead to wider adoption of digital payments.
To give an example, the number of instruments Prepaid payments (PPI) increased at increased annual growth rate (CAGR) 53% from 41 crores in May 2017 to 226 crores in May 2021.
“DAS said that 91% prepaid instruments were in the form of e-wallet and the rest in the form of a card.
He said the shift to digital has also been accelerated by a fast payment system, such as immediate payment services (IMP) and integrated payment interface (UPI), which gives credit directly to beneficiaries and is available at all times.
DAS shows that during June 2021, the payment system in India is processed at an average of more than 15 crore transactions every day, by almost 4.5 lakh crore every day.
From this, UPI itself witnessed more than 280 crore transactions.
At UPI, DAS said that globally, there have been many interest in the platforms that are developed locally.
Another innovation is the payment system activated Aadhaar (AEPS) which facilitates transfers / payments and cash withdrawals through micro-ATMs and banking correspondents (BCS) using Aadhaar authentication, he said.
During a pandemic, cash transactions at BC outlets through micro-ATMs witnessed a significant surge with more than 94 crore transactions contributed RS 2.25 lakh crore for 2020-21.
“Pandemics have accelerated the boost towards digitizing with a larger digital payment adoption.
It is important to take steps to unite larger digitalization with the purpose of financial inclusion,” said the watershed.
He added that all stakeholders must ensure that the financial ecosystem (including digital media) is inclusive and able to deal with risks effectively such as incorrect sales, cybersecurity and data privacy.