Why India lags peers in digital payments
By Tadit Kundu
From purchasing groceries via net banking to buying a cup of tea using Paytm, Indians are increasingly turning to digital payments for their daily transactions. Aided by supportive government policies, digital payments in India have grown rapidly in recent years. Between 2015 and 2017, digital payment transactions grew at an average annual pace of more than 50%, outpacing other major developing countries.
Yet despite this growth, after adjusting for population, India continues to lag other major countries. Among the BRICS countries (Brazil, Russia, India, China and South Africa), Russia leads the way with the average adult making more than 200 non-cash transactions annually.
In contrast, India remains at less than 20. India also lags in terms of the value of transaction. In 2017, the ratio of non-cash transactions to gross domestic product (GDP) stood at around 1.7 for India, the lowest among BRICS, and significantly behind China’s ratio of 45, according to data from the Bank for International Settlements.
Photo courtesy of Jan Arendtsz.