Indian payments ecosystem comprises various methods of payments which are classified into seven different categories as per RBI.
1. Payment Categories
RTGS (Low Volumes - 0.36%) - Customer transactions & Interbank Transactions
CCIL Operated Systems (Very Low Volume - 0.006%)- CBLO, Government Securities Clearing & Forex Clearing
Paper Clearing (1.51% of Total Volume) - Cheque Truncation System (CTS) , MICR & Non-MICR Clearing
Retail Electonic Clearing - ECS, NEFT, IMPS, UPI, ABPS and NACH
Cards (13% of Total Volume) - Credit Cards & Debit Cards
Prepaid Payment Instruments (PPIs) (11% of Total Volume) - m-Wallet, PPI Cards & Paper Vouchers
Mobile Banking
There has been a significant spurt in the volume of payments led by digital payments from financial 2015-16 to 2020-21
2. Demonetization led to a massive surge in usage of Mobile Wallets and Debit Cards:
Since Nov-16, post demonetization, there has been an enormous surge in digital payments. A sharp increase can be seen in the volumes of payments made by using Mobile Wallets & Debits Cards.
3. Covid-19 restrictions led to de-growth in consumption and a fall in Credit Card Payments
Credit Card spending saw a steady increase from 2015 till 2020 due to an increase in consumption patterns, which slowed down in 2020-21 due to falling in discretionary spending due to Covid-19.
4. Covid-19 lock-down and social distancing norms fueled UPI Payments growth
The introduction of UPI payment was a revolution in Indian Payments Ecosystem. Very easy and agile to use UPI Payment volumes have been surging since the launch. And the growth is exponential - from 9152 lacs in FY2018 to 53,915 lacs in FY2019, FY2020 saw a 2.3X increase to 1,25,186 lacs and again a 2X increase in FY2021 to 2,23,307 lacs.
As we speak, in FY2022, the UPI payments are rising from 1,05,590 lacs (Apr-Oct 2020) to 2,26,645 lacs (Apr-Oct 2021); it is almost a 2.14X growth.
Source: RBI Data & NPCI