Editorial: Digital transformation

Contrary to the initial apprehensions, common people have ceaselessly embraced the digital payment system

QR Code scanners are a ubiquitous feature of India’s landscape today. One finds them virtually everywhere; be it a humble vegetable vendor, a pan shop, a roadside eatery or a neighbourhood kirana store. The codes connect hundreds of millions of people in an instant payment system that has revolutionised the country’s commerce. Billions of mobile app transactions — the volume is more than the combined digital payments of four big economies of the United States, the UK, Germany and France — have helped in expanding banking services like credit and savings to millions more Indians, and extended the reach of government programmes and tax collection. According to the latest figures shared by the Reserve Bank of India (RBI), the payments through UPI (Unified Payment Interface) have grown exponentially in the past 12 months, with the number of daily transactions crossing 36 crore, up 50% from 24 crore in February last year. In terms of value, these transactions are worth Rs 6.27 lakh crore and the overall monthly digital payment transactions had crossed the Rs 1,000-crore-mark each month during the last three months. Not surprisingly, the scale and reach of India’s digital payment system have been met with a sense of awe by the rest of the world and several countries are keen to replicate the model. Contrary to the initial apprehensions expressed in certain quarters, common people have ceaselessly embraced the digital payment system. The scan-and-pay system is now one of the key pillars of digital public infrastructure and has made daily life more convenient, transparent and hassle-free.

While some of the developed countries are facing problems, India has emerged as a leader in the creation of digital assets. Easy and convenient modes of digital payment have registered substantial growth and have transformed the digital payment ecosystem in the country. At the same time, pre-existing payment modes such as debit cards, credit cards, National Electronic Funds Transfer (NEFT) and Real-Time Gross Settlement (RTGS) have also grown at a fast pace. At present, the UPI, launched in 2016, has emerged as the most popular and preferred payment mode pioneering person-to-person and person-to-merchant transactions accounting for 75% of the total digital payments. The value of UPI transactions has increased from just Rs 1,700 crore in January 2017 to Rs 12.98 lakh crore in January 2023. It has given a boost to small businesses and street vendors as it enables fast and secure bank-to-bank transactions even for considerably small amounts. The digital payment system was a saviour during the Covid-19 pandemic, allowing easy, contactless transactions. Several countries, including France, UAE, Saudi Arabia, Bahrain, Singapore, Maldives, Bhutan and Oman, have already embraced different forms of Indian payment systems implying that payments through UPI, RuPay or other Indian payment gateways will be accepted in these economies. Nepal was the first country to accept payment through UPI.

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