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Update: Reserve Bank of India’s Report on Benchmarking India’s Payment Systems
Update: Reserve Bank of India’s Report on Benchmarking India’s Payment Systems

July 7, 2022

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The Reserve Bank of India recently released its report on Benchmarking India’s Payment Systems (Report). The Report provides India’s comparative position vis-à-vis payments’ ecosystem globally i.e., for 21 countries including advanced economy countries, Asian economies, and BRICS nations. For the purposes of these rankings, there were four categories i.e., - leader, strong, moderate, and weak. The datasets relied upon for the purposes of this Report are from 2020.

Herein are the key observations from the Report:

  • India emerged to be a leader in regulation of costs of payment systems, deployment of ATMs, share of credit transfers in payment systems, cross remittances, number of credit card issued, availability of alternate payment systems amongst others.
  • In terms of volume and growth of e-money, customer safety and authentication standards, Ombudsman, India emerged as strong.
  • India emerged as moderate in use of digital utility payments in public mass transportation, cross border personal remittances – availability, rate of decline of cheques etc.
  • In people per PoS terminal, share of cheques in payment systems, people per ATM, mobile and broadband subscriptions, India emerged as weak.
  • Since the last Report in 2019, India has emerged as a leader in 16 areas compared to 10 in 2019.
  • There has been a decline in performance indicators in strong category which were 11 in 2019 and 9 in 2022. For ‘weak’ category also, there has been a decline since 2019 i.e., from 12 to 8.  

The key findings from the Report include:

  • The payment systems in India continued to demonstrate robust growth during the pandemic.
  • Regulations continues to be strong in India with many proactive customer centric initiatives being taken.
  • India is one of the few countries where the large value RTGS system is available round the clock.
  • India has two fast payment systems, viz. Immediate Payment Service (IMPS) and UPI, facilitating instant funds transfers. Further, the National Electronic Funds Transfer (NEFT) system operated by RBI is available 24x7 and ensures settlement in half hourly batches.
  • The CoVID pandemic related lockdowns and restrictions on public movement in 2020 had an impact on usage of payment instruments at retail outlets. This may be one of the reasons for the lower growth observed in card payments in India as compared to other payment categories in 2020. Overall, after an initial drop15, digital transactions picked up during the period as the focus was on “no / less” physical contact.
  • Notwithstanding the significant expansion in the payment acceptance infrastructure in India during the period, the people per PoS terminals remained high at around 300 people. The operationalisation of the Payments Infrastructure Development Fund (PIDF) in January 2021 has enhanced deployment of payment acceptance infrastructure. Further, India has over 150 million digital PoS terminals (QR codes) that facilitate acceptance of digital payments through cards, e-Money and UPI.

For more information, kindly write to Apurva@nasscom.in.


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Apurva Singh
Senior Policy Associate

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