RBI to enable 75 villages for digital payments with support from local entrepreneurs, merchants

Technology for MSMEs: Reserve Bank of India’s Governor Shaktikanta Das on Monday announced the central bank will initiate a 75 Digital Villages programme to enable 75 villages across the country with digital payments through awareness and support from local entrepreneurs and merchants. Launching the Har Payment Digital initiative to encourage digital payments adoption among people, Das said payment system operators (PSOs) will “adopt 75 villages in the country and convert them into digital payment-enabled villages,” under the 75 Digital Villages programme and in observance of 75 years of independence.

“They (PSOs) will conduct two camps in each of these villages to enhance awareness and onboard merchants in the village for digital payments,” Das said. “The payments ecosystem has a variety of payment systems that have facilitated migration to digital. Unified Payments Interface (UPI) has facilitated digital payments to merchants such as retail outlets, kirana stores, street vendors, etc. across the country,” he added.

Also read: Outlook: How 2023 will shape landscape of digital payments for retailers, small merchants

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PSOs are entities authorised by RBI to set up and operate a payment system. As of February 20, 2023, according to the data on the RBI’s website, there are 67 PSOs including NPCI, Mastercard, Visa, SBI, Punjab National Bank, Amazon Pay (India), PhonePe, Muthoot Finserv USA, Ola Financial Services, PayU Payments, and more under various categories such as retail payments organisations, card payment networks, ATM networks, prepaid payment instruments, etc.

Importantly, digital payments to merchants have also been on the rise in the country. The peer-to-merchant (P2M) UPI transactions grew 119 per cent in February 2023 to 415.32 crore from 189.58 crores in February 2022, according to the latest UPI data from NPCI. The value of transactions had also increased by 71.1 per cent from Rs 1.63 lakh crore in February 2022 to Rs 2.79 lakh crore in February 2023. P2M transactions had a 55.12 per cent share in total UPI volume of 753.4 crore transactions in February compared to 338.1 crore peer-to-peer (P2P) transactions with a 44.8 per cent share. 

Also read: UPI: P2M transactions jump 119% YoY in February 2023

Meanwhile, the Har Payment Digital campaign by RBI aims at reinforcing the ease and convenience of digital payments and facilitate onboarding of new consumers into the digital fold, Das said. “Various campaigns highlighting the digital payment channels available are being planned by the banks and non-bank payment system operators. This will further encourage and support the adoption of digital payments in the country,” he added. 

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