Cashless Economy…..India

Abstract

India is constantly speeding up its operations to achieve its objective of being an economy which is cashless, digital and transparent. In recent years, the Regulatory body of Indian banking system (RBI) have started to gear up with various initiatives, to make India on par with countries like Norway, Finland, Sweden and The Netherlands to grow its cashless economy and choose the way of digital payments. This study performs an analysis on the growth of digital payment system in India. The study evaluates the contribution of each digital payment system to the cashless ecosystem in India. It focuses on different cashless transaction system like Real time gross settlement (RTGS), Unified Payment Interface (UPI), National electronic toll collection (NETC), National electronic fund transfer (NEFT) and eleven more. The study takes into account the past seven financial years (2015-16 to 2021-22) to trace the growth trajectory of digital payments. The results show there is a constant growth in the digital payment ecosystem of India both in terms of value and volume among which UPI (Unified Payments Interface) ranks first when it comes to volume (number of transactions at a given period of time) and Real time gross settlement (RTGS) ranks first in terms of the value (the amount of money transferred). The cumulative result suggests that the percentage growth of the volume (312.64%) is significantly higher than the percentage growth of Value (73.07%) between the year 2015 and 2022 respectively. And as there is increase in the digital payment systems, the analysis shows that the usage of the paper-based instruments gets reduced from 15.59% contribution to just 0.96% contribution towards the total payment systems. These results indicate to the potential growth of digital and cashless economy with the help of banks as well as the contribution done by the Fintech (Financial technology) companies.