Digital payments have continued to gain traction in India. The value of IMPS transactions crossed INR 1000 billion in March 2018, and stood at INR 1130.1 billion in June; PPIs that hit a roadblock in February with the tightening of KYC regulations have once again moved up - from the peak of INR 149.6 billion in February 2018, dipping to INR 118.8 billion in March and swinging up again to INR 133.8 billion in April. The use of debit cards at PoS terminals are now at 30% of total use, a significant change from the 2016 levels of 15%.
However, the recently released Cashless Catalyst report, Merchant Perspectives on the BHIM Experience, shows that merchants and customers need significant hand holding to understand the entire digital experience. An intense pilot to assess the suitability of UPI as a payment solution for small retail merchants in a Jaipur neighbourhood brought out the ground level barriers that include on-boarding frictions, stickiness of cash in the merchant eco-system, low awareness and demand for the payment solutions etc. Studies like these should be initiated across the country for different consumer segments, to inform the regulator as well as industry towards effective response.
In January this year, the government announced a new focus on transforming the most underdeveloped districts of the country - 112 districts were identified as Aspirational and the Niti Aayog reported the First Delta Ranking of these districts last month, which includes progress on financial inclusion. An interesting outcome of this exercise is that the PMJDY website now has some data on the Banking Infra-Structure and Business Correspondents in these districts, which includes tracking the number of inactive agents as well – a first in India ever. We hope that such detailed data can be made available for all the districts of the country, to enable industry and banks to tailor their services and products appropriately and effectively.
The RBI released the Report of the High Level Task Force (HTF) on Public Credit Registry (PCR) for India in June, recommending a single PCR for the country. While a single comprehensive credit information repository covering all types of credit facilities will go a long way in removing the present information asymmetry that deters lending, hopefully the processes involved will be customer and lender friendly, and not raise additional barriers. Further, India needs more discussion to better understand the privacy and consent aspects in such aggregate databases.