Even as digital payments have significantly grown after demonetisation, the lack of infrastructure is still a major roadblock in Modi’s ‘Digital India’ mission. In the last five years, the digital payments in the country have witnessed a CAGR of 61 per cent in terms of volume but the density of population dependent on a PoS terminal continues to be the highest. “While India made considerable progress with reference to the absolute number of PoS terminals deployed, the density of population dependent on a PoS terminal continues to be high at 358,” RBI said. While this is a drastic improvement from the 1124 persons per PoS terminal in 2014, other CPMI countries had a better deployment rate, the central bank added.
Committee on Payments and Market Infrastructures (CPMI) serves as a forum for central banks to monitor and analyse developments in domestic, cross-border, and multi-currency payment, settlement and clearing systems. The Reserve Bank of India has listed out factors that are inhibiting the digital push in India. These are connectivity issues, inadequate acceptance, infrastructure, lack of familiarity with newer, alternative payment methods, delay in getting complaints resolved, and security and privacy concerns.
Meanwhile, the value of digital payments to GDP of India increased from 660 per cent in FY15 to 862 per cent in FY19, making a significant shift to digital payments in India. A comparison with other CPMI countries shows that India is amongst the few countries like Argentina, Brazil, China, and the UK, where the value of digital payments as a percentage of GDP has increased.