India now leads the world in fast payments, thanks to the rapid growth of the Unified Payments Interface (UPI), while using other payment methods such as debit and credit cards, according to the International Monetary Fund report (IMF).
UPI is a real -time payment system developed by the Indian company National Payments Corporation (NPCI). It allows people to make immediate transfers of the bank to the bank using their mobile phones.
In his note, “the growing retail digital payments: the value of interoperability” said that its use has increased since the opening of UPI in 2016, while the use of cash and other forms of payments began to decline.
Today, UPI is processed every month over 18 billion transactions, making it the most used digital payment system in India.
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“India now makes faster payments than any other country. At the same time, the proxy has fallen for cash use,” the note said.
The note represents evidence in accordance with this frame using granular data covering the universe of transactions on the UPI Indian, an interoperable platform that has become the largest retail retail payment system in the world.
“Since its launch in 2016, UPI has grown rapidly, while some of the cash uses have begun to decline. UPI now processes more than 18 billion transactions per month and dominates other electronic retail payments in India,” Finech said.
FINTECH notes offer practical advice of IMF employees on politicians on important questions.
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He stated that interoperable payment systems such as UPI are alternatives to closed loops that could also support the acceptance of digital payments. Such systems allow smooth payments between users of different payments providers.
“The important thing is that total digital payments also grow compared to the representative for the use of cash,” he said.
The note also stated that the estimate of cash use is difficult, as cash transactions may occur anonymously and may not be recorded in any book, especially in the informal sector.
“However, we can approach the use of cash with the selection of an automated machine (ATM) in each district. When we measure the impact of integration on transaction values relative to cash withdrawals, we find a very similar image,” he said.
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This note said that total digital payments in relation to cash withdrawals are significantly increased after integration in districts that face de facto interoperability, significantly increase after integration in districts facing a greater increase in de facto.
This evidence suggests that interoperability can actually support the acceptance of digital payments and support the transition from cash, he added.
FINTECH Note was prepared by Alexander Copestake, Divya Kirti and Maria Soledad Martinez Peria.
The authors also stated that when the interoperable platform ripens and more providers are connected, politicians are to monitor the creation of dominant private providers and are ready to take steps to maintain a fully open, interoperable and competitive system.
“The payment authorities should use a number of metrics to identify potential threats for this objective and adapt any response to a specific basic anti-competing mechanism,” he said.
At all stages of development, the system operator should consult with current and potential participants in the private sector to ensure that its design elections support the health of an interoperable ecosystem, the note said.
(With inputs from the press agency PTI)
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