Payments and Settlement Systems Act should be changed so that they become an enabler for latest technologies in the digital payment space, said Ratan P Watal, Principal Adviser, NITI Aayog.

Speaking at a conference on ‘Digital Payments - Trends, Issues & Opportunities’ organised by the Federation of Indian Chamber of Commerce (FICCI) and NITI Aayog here on Tuesday, Watal said, “Technology is changing at a much faster pace than legislation.” But the law cannot be lax that will let every player in and at the same time it should not be too stringent that it is unable to adopt latest technologies.

There is a need to relook at the Payments and Settlement Systems Act and discussions are underway to make some changes to the law, he added.

This comes at a time when digital transactions are on the rise. According to the second edition of the booklet on Digital Payments – Trends, Issues and Opportunities released here by the NITI Aayog, the total digital payment market in India is expected to touch $1 trillion by 2023. Mobile payments are expected to grow from $10 billion in 2018 to $190 billion by 2023. This growth is will be driven by IMPS, Prepaid Instruments, UPI, ECS / NACH and online spends, the report stated.

Going by the data provided by Ministry of Electronics and IT the volume of overall payments steadily increased over the period 2011-12 to 2015-16, recording a compound average annual growth rate (CAGR) of over 58.9 per cent. The rate of growth in volume of overall payments further accelerated to 104.4 per cent per cent in 2017-18, which is higher than the trend growth rate over the last five years. The growth, the report states, could be attributed to development innovative digital payments.

Watal said that while cash is still important, we can do things more efficiently. Government is already taking lot initiatives in this regard. “But what ministry and industries are doing should converge,” he added.

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