RBI’s Digital Payment Index

The Reserve Bank of India recently released the Digital Payment Index. According to the index, the digital payments in the country have increased by 40% in September 2021 as compared to March 2021.

Key findings

The index measure of online transactions was 304.06 in September 2021. It was 270.59 in March 2021. In September 2020, the online transaction measure was 217.74. The index is released in the months of March and September.

Base of the index

The base year of the RBI Digital Payment Index is 2018. This means the score of the index for the March period was set to 100. The index value has increased by 2.7 times within three years.

Formulation of the index

The index is formulated based on five parameters. They are payment enablers (25%), consumer centricity (5%), payment performance (45%), supply side factors (15%), and demand side factors (10%). The index is published in semi – annual basis. It was first released in March 2021.

Inference

The payments through digital payments have increased by 39.64%. The Unified Payment Interface in the second quarter has increased by 82%. In Q2 around 19 banks joined the UPI system. The number of Point of Sale terminals increased by 13% in Q2 as compared to the previous quarter.

Other publications by RBI

  • Report on Foreign Exchange Reserves: Published twice a year
  • Monetary Policy Report: Published twice a year
  • Financial Stability Report: Published twice a year
  • Inflation Expectation Survey of Households: Published four times a year
  • Consumer Confidence Survey: Published four times a year

How did the digital payments increase?

  • The payments increased mainly because of key measures made by the National Payment Corporation of India (NPCI). The NPCI had given approval for the WhatsApp to go live with UPI. As soon this was done, the user base increased to two crores.
  • Payment Infrastructure Development Fund (PIDF) was created. It was created to encourage Point of Sale deployments.

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