Digital Payment will soon be country’s norm: Finance Ministry

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Digital payment will soon be the norm in the country, Finance Ministry officials said on Monday, as the monthly transactions crossed 300 million mark through Unified Payments Interface (UPI).

Economic Affairs Secretary Subhash Chandra Garg took to social media and tweeted “digitalisation of payments in India is marching ahead with gusto. With base of 100 million Indians connected with digital payment ecosystem rising at a fast clip, India will soon be a digital payment society.”

Financial Services Secretary Rajeev Kumar said the spurt in digital transactions reflects the changing behaviour of consumer and wider adoption of the technology in society.

"Digital India making deep inroads into consumer behaviour. BHIM UPI txns show increasing user adoption month on month. Aug '18 txn count/value up by 32.7% & 18% over July '18. Building a less-cash and financially-inclusive economy," Kumar tweeted.

Launched in 2016, the real-time bank-to-bank payment system on mobile platform, UPI, registered 312.02 million transactions in August.

According to the National Payments Corporation of India (NPCI), the number is up by 32 per cent from 235.65 million transactions in July.

In terms of transaction value, the money transferred through India's flagship payments platform went up 18 per cent to Rs 54,212.26 crore in August from Rs 45,845.64 crore in July, the NPCI said, which developed the platform, in its monthly update on UPI.

Transactions with debit or credit in the same account for the month of August is not included in the data, it said.

It had directed the banks to stop transactions from different UPI applications with debit and credit happening in the same account from August 1, which would prevent artificial transactions by fintech companies to increase UPI numbers.

The number of banks attached to UPI has gone up from 55 in August 2017 to 114 in August 2018, in one year.

According to the NPCI data, year-on-year, the volume of transactions shot up 19 times from 16.6 million in August 2017 to 312 million last month.

NPCI, which is owned by a consortium of major banks, launched UPI 2.0 last month. This allows introduction of more facilities by banks, which include linking customers' overdraft accounts with UPI and checking invoice before payment.