After it falling short of digital payments target last year by 18 per cent, the government has asked all payment companies and banks to increase 50 per cent digital transactions in the current fiscal, according to reports.
Digital payments include Unified Payment Interface (UPI), Aadhaar-enabled payment system (AEPS), digital wallets, IMPS and point-of-sale (POS )terminals. The UPI-based have grown at exponential levels since they were launched.
A target of 30 billion transactions- 22.7 billion transactions to be recorded by the banking sector and rest 6.3 billion transactions to be done by payment wallets, has been set by the government.
Transactions FY 18: 20.3 billion transactions
Target FY 18: 25 billion
New target FY 19: 30 billion
How will it happen?
The government proposes that banks increase POS installments 20 lakh POS. POS terminals doubled to 3 million from around 1.5 million before November 2016 The target is to have 5 million payment terminals by the end of this year.
New entrants like WhatsApp UPI, Google Tez and PhonePe amongst are expected to drive growth.
Digital transactions are restricted to urban areas mostly. Moreover, due to full KYC and strict data storage norms, transaction of mobile wallet have not picked up.
However UPI-based transactions grew to 178.05 million in March with 91 banks supporting the UPI app .