Can India get to 25 billion retail digital transactions in 2017–18?

Author(s): 
Mahadevan Balakrishnan, Payment System Development Group, World Bank

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Abstract: The government of India has set a target of 25 billion retail digital transactions for the year 2017–18 and is pushing all agencies to work towards this goal. This is an ambitious goal when one considers that India had only 9.6 billion retail digital transactions in the year 2016–17. This paper examines the last 10 years of payment system data to establish trends and identify when India is likely to reach this target of 25 billion retail digital transactions. It also examines where India stands on the Rogers diffusion innovation curve with regard to the adoption of digital payments. Drawing on statistics from the Committee on Payments and Market Infrastructures, the paper discusses aspects that support the adoption of digital payments. It then proposes strategies for how India could meet the government’s goal more quickly, including pricing decisions, reducing taxation, widening access and tapping specific market segments. While this paper focuses on India, the strategies are applicable to any developing country interested in strengthening digital payments.

 

Keywords: digital payments, India, retail payments, Immediate Payment System, national automated clearing house, digital ID (AADHAAR) based payments, CPMI statistics

 

Mahadevan Balakrishnan has over 25 years’ banking/technology leadership/management experience with leading banks such as ABN AMRO Bank, Barclays and Citibank. He has worked for the World Bank’s Payment System Development Group, helping developing nations improve their financial market infrastructure, and before this, was Chief Operating Officer for the National Payments Corporation of India and created multiple retail payment systems for India.

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