In just a matter of one year, UPI payments in India shot up 8.7 folds to Rs 8.7 lakh crore in FY19. Similarly, overall mobile transactions also grew rapidly to Rs 29.5 lakh crore in FY19.
In just a matter of one year, UPI payments in India shot up 8.7 folds to Rs 8.7 lakh crore in FY19. Similarly, overall mobile transactions also grew rapidly to Rs 29.5 lakh crore in FY19, according to RBI. However, as India moves towards the goal of Digital India by improving online infrastructure and internet connectivity, the spike in digital payments frauds is also significant. While, this makes the digital payments a worry for a large number of people, even now, it is not widely used in the unorganised sector due to the requirement of a smartphone, good internet connectivity and most of all, awareness of the procedures for digital payment.
How much is digital payment an alternative of cash?
Cash is still the king in India’s informal sector, which constitutes a larger portion of the economy. Be it a vegetable market or a roadside food stall, digital payments are still not the first thing they prefer. “While we support the initiative of the government in building up the ecosystem for the digital economy, we feel the practical aspects of the availability of cash for underserved populations should be considered as well,” Nakul Pasricha, President, Authentication Solution Providers Association, told Financial Express Online.
Citing the World Payment Report 2019, he added that in most of the countries, cash payments’ share in total payments volume, is declining. However, cash in circulation remains stable or up slightly over the past five years. Thus, there will be a combination of cash and digital payments for the foreseeable future.
Need to curb digital payment frauds
With regard to debit card, credit card, and internet banking transactions of over Rs 1 lakh, there were 1,367 frauds reported in FY 2016-17; 2,127 frauds in FY 2017-18; and 1,477 frauds in FY 2018-19, Anurag Thakur, Minister of State for Finance, said in a written reply in the Rajya Sabha. This makes digital payments frauds – up to half – of all bank fraud cases. Such a large number of digital frauds may affect the trust of the consumers. Irrespective of which mode is used, it is important to have strong security and anti-fraud measures which ensure consumer trust, which will be a cornerstone of the growth, said Nakul Pasricha.