New Delhi: The number of digital payment transactions increased significantly during the last few years — from Rs 2,071 crore in FY 2017-18 to Rs 8,840 crore in FY 2021-22.
As per a written reply by the Union Ministry of Electronics in the Lok Sabha on Wednesday, during the last five years, various easy and convenient modes of digital payments, including Bharat Interface for Money-Unified Payments Interface (BHIM-UPI), Immediate Payment Service (IMPS), and National Electronic Toll Collection (NETC), have registered substantial growth and transformed the digital payment ecosystem by increasing person-to-person (P2P) as well as person-to-merchant (P2M) payments.
BHIM UPI has emerged as the preferred payment mode of the citizens and has recorded 803.6 crore digital payment transactions with the value of Rs 12.98 lakh crore in January, it said.
The Ministry informed that Growth of Digital Payments in India and availability of various easy and convenient digital payment solutions have facilitated ease of living for citizens, financial inclusion, and growth of business and economy.
During the pandemic, availability of contactless digital payment solutions such as BHIM-UPI facilitated social distancing and continuity of businesses, including small merchants.
Unlike cash payments, digital payments automatically establish a user’s financial footprint, thereby increasing access to formal financial services, including credit.
Banks and other lending institutions can utilise digital transaction histories to take cash flow-based lending decisions for both retail lending and lending to businesses, including small businesses who may face difficulty in getting credit in the absence of verifiable cash flows, said the Ministry.
Recipients of cash payments not only often have to travel considerable distances to receive their payments, but are also particularly vulnerable to theft.
Digital payments across India are secure as multiple levels of authentication are required for making transactions, the reply added.