India Lags Peers in Its Bid Towards a Cashless Economy
The past couple of years have seen a number of initiatives to facilitate cashless transactions in the Indian economy, including the launch of the Unified Payment Interface (UPI) earlier this year. Such moves may raise the volume of cashless transactions in India in the years to come but the latest available internationally comparable data shows why moving towards a cashless economy remains a Herculean challenge for the country.
Data pertaining to payment, clearing and settlement systems in 23 major economies, recently released by the Bank for International Settlements (BIS) shows that India lags far behind both emerging market and developed peers in the move towards a cashless economy. Non-cash payments transactions in India amounted to only 11 per inhabitant in 2015, much lower than other BRIC economies, with China reporting 17 such transactions per inhabitant in 2014 (data for China is unavailable for 2015).
The proportion of non-cash transactions is of course much higher in the advanced economies. The average non-cash retail transactions per inhabitant was 355 in the UK and 403 in the US.