Prime Minister Narendra Modi-led government has completed four years in office. During this period, it carried out several economic reforms and development programmes in terms of the banking and financial sector.
Out of all, digital payments in particular garnered a lot of popularity. The volume of Transactions in e-payments grew by five times in the last four years, according to data by Ministry of Electronics and Information Technology.
While the volume of transactions was reported at 317.60 crore in Financial Year 2014-2015, it inflated to 1605.30 crore in Financial Year 2017-2018.
Not just volume but the value of transactions in terms of e-payments also grew in FY 2017-2018 as compared to FY 2014-2015. The growth reported is 1.5 times.
Centre’s flagship initiative Unified Payments Interface (UPI)-Bharat Interface for Money (BHIM) and USSD (Unstructured Supplementary Service Data) collectively achieved 7.6 times growth during November, 2016-February, 2018.
Data suggests that that Immediate Payment System (IMPS) grew by 240 per cent during the above mentioned period.
The Government has incentivised the usage of BHIM App for making digital transactions. With effect from January 2018 MDR on debit card transactions of value upto Rs 2000 is to be reimbursed to the banks by the Government in order to bring such transactions on par with cash.
Besides Ministries and departments such as Railways, Petroleum and Natural gas etc are offering incentives to promote digital payments. Through the programme of Pradhan Mantri Gramin Digital Saksharta Abhiyaan (PMGDISHA) measures are afoot to train six crore persons in rural areas, across
“India is a cash-based economy with transactions from small disorganised merchants to organised retail being predominantly in cash. While the government and regulator have taken steps to grow the digital pie, the growth has been slow and steady rather than startling. With most of the Indian public now owning a debit card courtesy the PMJDY, the availability of new and convenient payment mechanisms like UPI and the focus on driving POS acceptance including rural India, the share of digital payments is slated to grow. As customers realise the sheer convenience of using digital platforms like cards, Ecommerce, Wallets, UPI, QR code payments, Mobile NFC etc, digital payments should grow significantly in the next few years,” said Avinash Luthria Business Head, Financial Processing and Licensing, at Worldline South Asia and Middle East.
States/UTs in various aspects of digital literacy including digital financial literacy, covering one member from every eligible household in about 40 per cent of rural households by 31st March, 2019. Besides there are 2,92,406 number of Community Service Centres (CSCs) of which 1,83,005 number are operating in rural area and these CSCs play crucial role in enabling and facilitating digital transactions.
However, despite the immense popularity of digital payments post the demonetisation drive, the largest data breach in India’s banking system struck in 2016. This massive attack affected nearly 3.2 million debit cards in 2016.
“Secure banking based on technology and its ramifications including cyber-crimes in today’s digital banking landscape has become a pivotal concern for banking and FinTech companies. Advanced fraud detection mechanisms, personalised security preferences and alerts have been implemented by the Banks to enhance the security in the payments ecosystem,” said Suresh Rajagopal, President, Software Business, FSS.
Explaining the role of banks in terms of security measures, he added, “The Banks in India are adopting the Security Standards prescribed by Government of India, Reserve Bank of India and NPCI. Also, Banks are subject to Third Party Audits for their IT infrastructure. Banks also carry out the Audits of their entire Supply Chain to ensure the Security standards are being followed. FSS being a pioneer in payment ecosystem, has product lines that comply with the highest levels of industry security standards including PCI PA-DSS and are SaaS-ready. They are benchmarked for high levels of performance and scalability to help financial networks be future safe and transact with total confidence. The products include ACS, Sentinel, Toggle, Token Vault and Paynalytix.”