This year, India’s overall ranking on the government’s adoption of digital method payments moved up 8 ranks; from the 36th place in 2011 to the 28th in 2018.
According to a survey, India still has more to do about its digital ecosystem, infrastructure, access and socio-economic factors. The survey said that India is making progress in advancing government e-payments capabilities. It is one of the top-performing countries in terms of citizen-to-government (C2G), business-to-government (B2G) and government-to-business (G2B) transactions.
The Policy Commission of India, that is the National Institution for Transforming India (NITI Aayog), released a press statement earlier this year that said the digital payment market in India is expected to grow to US $1 trillion by 2023.
This growth in the mobile payments market has presented several big business opportunities for players in the digital space. Mobile payments are expected to rise from US $10 billion in 2017-2018 to US $190 billion by 2023.
According to the survey, India holds the top ranking on B2G and G2B and comes third on C2G along with Argentina. Norway is at the top of the list, followed by France and Denmark.
The survey that covered 73 countries was last conducted in 2011. It studies the availability of government electronic transaction services, the digital context, and the type of support available for the digitisation for all transactions in a market, such as policy and infrastructure.
It suggested the country can further improve its standing by focusing specifically on expanding access to digital infrastructure, investing in socio-economic development, and promoting a healthy, competitive market.
The digital payments movement in India has been growing, in August, the Indian Finance Minister said that digital payment will soon be the country’s norm. With over 300 million monthly transactions through the Unified Payments Interface (UPI), the Government claimed that around 10 million people are a part of the digital payments space.
Launched in 2016 under Digital India, UPI is a system that powers several bank accounts into a single mobile application (of any participating bank), merging several banking features. The National Payments Corporation of India (NCPI) said that UPI registered around 312 million transactions in August, up 32% from 235 million transactions in July.
Although the CSC (Common Service Centre) initiative has been working to provide affordable data plans, a number of remote communities in the country still lack reliable access to the Internet. The same is also the case with payment acceptance infrastructure, where the country lags behind despite government programmes and schemes.
The survey ranked India 60th among the 73 countries on socio-economic development and highlighted the need to focus its efforts on building awareness for digital payments, as well as its citizens’ and businesses’ engagement with Internet-enabled services.
While the country has done well on financial inclusion, its overall performance in inclusiveness dropped due to a lack of government integration of the informal economy.
The survey also noted that the government incentives on digital payments adoption is restricted to only specific types of digital payment methods, which limits its efficacy.