

Reserve Bank of India launches Digital Payments Index
Published 5 January 2021
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In what could be a first of its kind initiative, India’s banking regulatory body Reserve Bank of India (RBI) has launched a composite Digital Payments Index (DPI) to capture the extent of digitisation of payments across the country.
The RBI-DPI comprises 5 broad parameters that enable measurement of deepening and penetration of digital payments in the country over different time periods.
These parameters are
(1) Payment Enablers – which carry a 25% weightage
(2) Payment Infrastructure – Demand-side factors, which carry a 10% weightage
(3) Payment Infrastructure – Supply-side factors, which carry a 15% weightage
(4) Payment Performance, which carry a 45% weightage and
(5) Consumer Centricity, which carry a 5% weightage
Each of these parameters have sub-parameters which, in turn, consist of various other measurable indicators.
The RBI-DPI has been constructed with March 2018 as the base period. What this means is that DPI score for March 2018 is set at 100. The DPI for March 2019 and March 2020 work out to 153.47 and 207.84 respectively, indicating appreciable growth. Going forward, RBI-DPI shall be published on RBI’s website on a semi-annual basis from March 2021 onwards with a lag of 4 months.
This development needs to be seen in the backdrop of a surge in digital payments adoption post the Indian government’s demonetisation push in 2016. A recent KPMG report in August 2020 pointed out that going forward card payments will rise significantly mainly driven by contactless transactions, as a result of COVID-19. Further mobile wallets, payment gateway transactions and online bill payments through Bharat Bill Payments (BBPS) will rise significantly. For October, bill payments jumped 58 per cent to 23.7 million with almost $533 million worth of transactions digitally.
Further, Unified Payments Interface (UPI) saw a massive increase in adoption. It has almost doubled in 2020 both in terms of volume and value. UPI saw its growth being driven by larger adoption of digital payments across categories, along with its usage in QR code-based payments. Further the launch of UPI 2.0 has helped open up new use cases on the platform and has managed to set itself up as a default P2P payment mode.
You can glean more insights on Digital Payments during W.Media’s Digital Week 2021, from February 23-26. https://w.media/digital-events/