Digital Payments Increase by Whopping 55 percent in 2016-17

The RBI data shows that the volume of digital payments has recorded a CAGR of 28 percent during the five-year period ending 2015-16.In contrast, the increase has been a whopping 55 percent in 2016-17, according to an analysis and evaluation of the current digital payments landscape in the country as captured by NITI Aayog.

Further, the value of overall payments was around 13 to 14 times of GDP during the five-year period. In contrast, the outstanding stock of currency in circulation, which hovered around 12 percent of GDP during 2011-12 to 2015-16, declined to 8.8 percent during 2016-17, reflecting the impact of demonetisation partially offset by the ongoing re-monetisation process.

This trend was shared by Ratan P Watal, Principal advisor, NITI Aayog and former Finance Secretary, while unveiling the booklet on ‘Measurement of Digital Payments – Trends, Issues and Challenges’ prepared by NITI Aayog.  

Watal said that the retail payments segment accounted for as much as 98 to 99 percent of total volumes. Of this, the share of paper clearing, which formed over half the total volume in 2011-12, steadily dropped to 16 percent in 2015-16 and further to 11 percent in 2016-17 with a corresponding increase in the combined share of electronic clearing and cards.

He said that these figures are truly reflective of the fact that India today stands at the cusp of a digital payments revolution through rapid penetration of digital payments infrastructure across the length and breadth of the country.

Due to innovations in digital payment technologies and increasing consumer satisfaction, the growth trends in digital payments are positive and will continue to dominate the payments landscape in India. This dispels the doubts raised by some commentators regarding the growth of Digital Payments, subsequent to demonetization.

Watal said that NITI Aayog’s analysis based on a more comprehensive analysis of digital payments growth drivers, the growth in Digital payments in 2016-17 was 55 percent in volume terms and 24.2 percent in value terms. In April 2017, there has been again a significant growth in digital payments as compared to April 2016.