Impressive Penetration of Digital Payments

Payments are made using payment instruments. Cash, for example, is a payment instrument. So too are cheques. Digital payment is a way of payment which is made through digital modes. In digital payments, payer and payee both use digital modes to send and receive money. It is also called electronic payment.

A few days ago, I went to pick up my son from his hospital in the morning; he was finishing his night duty. We decided to have tea from the tea-shop just next to the hospital gate. I was surprised to find that the tea-seller was accepting digital payments. Then again, a couple of days ago, I found a panipuri (a.k.a. fuchka, golgappa, etc.) seller on Main Road, Ranchi is accepting digital payments. My son and I had some panipuris and paid him ₹20 ($0.28) through UPI via Google Pay and he gladly accepted the payment. I am impressed by the spread and penetration of digitalised payments in India. Roadside vendors and hawkers in cities like Ranchi are accepting digital payments reflect wide acceptance and usage of digital payments in India.


India is riding on a new wave of digitised services and payments, signifying a transformational process deep seated within the way transactions are carried out by individuals and enterprises in India. Interestingly, a large part of the activity in the digital payments space has been led by non-banks. Unlike China, mobile payments in India are being built on public infrastructures like Unified Payment Interface or UPI  and Aadhaar-linked electronic payments that allow open-architecture and an inter-operable payment system to evolve. Digital giants like Google offer seamless payment services leveraging UPI through Google Pay.

From being primarily a cash-obsessed economy, India’s digital payment story is new but exciting. The digital payments economy in the country received a major push in the form of the government’s Cashless India initiative – launched under the Digital India campaign. The growth of the digital payment sector is driven by multiple factors including convenience to pay, the ever-growing smartphone penetration, the rise of non-banking payment institutions (payments bank, digital wallets, etc.), progressive regulatory policies and increasing consumer readiness to the digital payment platform.


As per the India Brand Equity Foundation blog post, when it comes to the ecosystem of digital payments, India is pegged to have the most evolved system compared to 25 other countries which were surveyed by FIS, a US-based banking technology company, headquartered in Jacksonville, Florida. This included the UK, China, and Japan. The parameters that FIS used to measure the digital payments in these 25 countries include round-the-clock availability of the services, adoption, and immediacy of payments.

FIS’ Flavors of Fast used the Faster Payments Innovation Index (FPII) rates different payment systems across these 25 countries on a scale of 1-5, with 5 being the highest rating. According to FPII, India’s IMPS service was the only system to get a level 5+ rating, leaving behind countries like UK, Singapore, Denmark, Switzerland, China, Japan, and others. This certainly puts India’s digital payments story to be an exciting one.

As per the Financial Inclusion Lab of FIS, India is one of the countries with the most advanced and innovative payment instruments; it even ranks No. 1 on FIS’ payment index. With WhatsApp, the most widely used messenger app in the country with almost 200 million users, rolling out its payments feature (currently available only in the India market), a peer-to-peer system based on UPI – India seems all set for a digital payments revolution.

Digital Payment market is booming thanks to the introduction of new technologies that continuously converge with others and encourage the emergence of innovative payment methods and consequently creating business opportunities. The digital payments market is expected to grow at an average annual growth rate of 18 percent between 2018–23, with a turnover expected to reach $87 billion by 2023, according to a ReportLinker report.

Innovation has been one of the biggest drivers for the growth of India’s digital payments economy. Along with the increasing adoption of smartphones, the availability of affordable mobile internet is doing wonders for the digital payments market in India.

21 thoughts on “Impressive Penetration of Digital Payments

  1. True. And the beauty of this Digital Revolution is that smaller cities/ towns have embraced it open arms and pushing it further.
    The Delhi Golgappa walas are yet to even accept any form of digital payments, they still prefer Hard Cash!!!
    In Hyderabad, the electrician accepted PayTM so did the plumber!!! 😃😃

    Liked by 2 people

  2. There’s a long way to go when it comes to digital payments. There are still many issues. Even now, cash and a credit card are more reliable. It will take some more time for them to evolve

    Liked by 1 person

  3. Agree. Even issues of security on digital payments are much more comprehensively addressed in India than in many other places, eg. India might have been among the earliest to require a second level authorisation on Card payments, instead of just swiping and paying.

    Liked by 1 person

Please add a comment if you enjoyed this post.

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s