Thursday, January 20, 2022

Huge surge in digital payments in India

NPCI and its digital payment platform UPI have contributed a lot in the digital transformation in the country. Digital transactions have seen a massive adoption in India during the last couple of years.

Delhi: India has seen massive adoption of digital payments by the masses during the last 3 financial years. In the current financial year, the total transactions through digital mode have reached upto 3682.84 cr. During 2020-21, the total digital transactions had reached 4374.45 cr. Digital payment platform UPI has contributed a lot in this digital transformation in the country.

As apprised by Ministry of Electronics and Information Technology (MeitY), Digital India Programme has made a significant and positive impact in the lives of common citizen in the country. This was stated by Union Minister of State for Finance Dr Bhagwat Kisanrao Karad in written reply to a question in Lok Sabha today.

As a result of the initiative taken, the Minister stated, the number of digital payments in volume terms have increased over the last 3 financial years (FY) as illustrated below:

In 2018-19 the total volume was 2326.02 cr, while in 2019-20 it reached 3400.25 cr.

Giving more details, the Minister stated that as apprised by Reserve Bank of India (RBI), in terms of extant instructions, with effect from September 7, 1999, Scheduled Commercial Banks have however been given the freedom to fix service charges for various types of services rendered by them. While fixing service charges, banks have, however, been advised to ensure that the charges are reasonable and not out of line with the average cost of providing these services.

They have been further advised to identify basic services and the principles to be adopted /followed by them for ensuring reasonableness in fixing such charges and to take steps to ensure that customers are made aware of the service charges upfront and changes in the service charges are implemented only with the prior notice to the customers.

The Minister further stated that the above instructions are consolidated in paragraph 6 of Master Circular on ‘Customer Service in Banks’ issued vide DBR. No.Leg.BC.21/09.07.006/2015-16 dated July 1, 2015, which is available on RBI website http://www.rbi.org.in . Also, RBI vide circular DPSS.CO.PD No. 1633 / 02.14.003 / 2017-18 dated December 06, 2017, banks have, inter- alia, been advised to ensure that merchants on-boarded by them do not pass on MDR charges to customers while accepting payments through debit cards.

Further, vide Circular 32 of 2019 dated 30.12.2019 of Department of Revenue, any charge, including the Merchant Discount Rate (MDR), shall not be applicable on or after 01.01.2020 on payment made through prescribed electronic modes i.e. RuPay Debit card, BHIM-UPI and BHIM-UPI QR Code, the Minister stated.

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