The Reserve Bank of India will issue periodic scores that will assess the performance of the digital payments industry, focusing on critical parameters as Rural Penetration and innovation in pre-existing modes and channels. The index would be made available in the public domain from July 2020.
The current position of India in Digital Paments
As per the current statistics, Digital payments in India is increasing wherein the Reserve Bank will construct and publish a composite DPI to capture the extent of digitization of payments.
The scoring system DPI would be based on several parameters and would reflect the deepening and penetration of various digital payment modes. The Government is aggressively trying to drive the financial inclusion agenda, periodically track digital payments.
RBI also measures the sector progression and checks whether aligned to their target Goals.
The new scoring system will allow the stakeholders and consumers to analyze the need for local area development infrastructure, demographics, and acceptance related growth perspective in reference to broader national and global standards in the digital payments.
RBI also turns to publish guidelines for setting up Self-Regulatory Organisation (SRO) in April 2020, enhancing the communication mechanism between stakeholders such as Service providers, Banks, regulatory and supervisory bodies such as (NPCI) National Payments Corporation of India (NPCI) and Reserve Bank of India (RBI).
What is SRO?
SRO (Self Regulatory Organization) is a non-governmental organization with the power to create and enforce standalone industry and professional regulations.
Payments Council of India is currently the most significant industry body that fulfills in India’s Digital Payment Industry.
It is desirable to have SRO for orderly operations of entities in the payment system, considering the substantial growth in digital payments and maturity gained by bodies in the payment system.
How will Digital Payments Index be beneficial?
DPI will be beneficial to understand the current usage of digital channels in urban and rural areas. Banks and all digital payment companies will get to know about the channels which are more popular among consumers.
The mapping of digital payments will help the end consumers know and evolve in the space.
The initiative will enable companies at an individual level to gauge the ground level effectiveness of various programs already running in the country. The launch of the index will assist the financial payments ecosystem in identifying growth areas and improve the widespread permeation of all cashless payments.
Reserve Bank of India estimates the total digital transactions in terms of the volume recorded a growth of 58.8% during 2018-19, which is on top of growth of 50.4% during 2017-18.
As per RBI, the digital transactions grew by 19.5 percent during 2018-19, compared to 22.2 percent during 2017-18.