India has over 825.30 million Internet users and around 1.2 billion mobile users. 1.3 billion people — almost 90 per cent of India’s population — have Aadhaar, and over 80 per cent of Indians aged 15 or more have a bank account. Over 340 million Indians enjoyed doorstep banking through AePS in FY21. So far, 714 million RuPay cards have been issued that have clocked over 1.3 billion transactions.
In 2021, India accounted for the largest number of real-time transactions — 48.6 billion, which is almost three times the number of its closest challenger, China (18 billion transactions), and almost seven times the combined real-time payments volume of the world’s leading economies – the US, Canada, the UK, France and Germany (7.5 billion transactions).
India’s UPI has perhaps grown at a pace that is faster than any other real-time payments system around the globe. In FY22, UPI enabled 45.6 billion transactions worth $1 trillion, making it the best-performing real-time payment ecosystem in the world. UPI has witnessed spectacular growth ever since its launch in 2016, in sync with India’s high economic growth trajectory and enhanced adoption of digital payments in the country.
The widespread adoption of real-time payments in India is estimated to have yielded cost savings of about $12.6 billion for Indian businesses and consumers in 2021, thereby helping unlock $16.4 billion of economic output, representing 0.56 per cent of India’s GDP. The growth and innovations in India’s fintechs space is propelling India towards becoming a less-cash society.
India’s digital payments ecosystem is unique in terms of the successful working partnerships it has forged between society, the government, regulators, payment companies, banks, non-banking financial service companies and fintechs. The ripples of India’s digital payments success are already spreading around the globe. Akin to the model of ecosystem level collaboration adopted by India’s National Payments Corporation of India (NPCI) domestically, NPCI International Payments Limited (NIPL) is now looking to build strategic partnerships for facilitating the internationalisation of India’s self-reliant payment systems, especially UPI and RuPay, to newer markets around the globe. The government and RBI are actively supporting this initiative to make India’s domestic platforms go global.
Many successful partnerships are already in play with institutions such as Mashreq Bank’s NeoPay and Mercury in the UAE; Discover Financial Services (DFS) in the US; Japan Credit Bureau in Japan; Union Pay International in China; Royal Monetary Authority in Bhutan; NSBL in Nepal; and Network for Electronic Transfers in Singapore. Others in the pipeline include Terra Pay in the Netherlands; BUNA (Arab Monetary Fund) in the Arab world; Al Ansari Exchange and Network International in the UAE; GPS and Manam in Nepal; and LiquidPay in the ASEAN Region.
The pillars of UPI are based on interoperability, real-time payments, an API-driven and open banking model that runs on aliases, a collaborative engagement model, and integration with multiple servicing channels. The interconnected suite of India’s digital payments systems as a whole allows for easy identification of account owners, routing of payments, and handling of digital information, which makes it easier for other countries to replicate the model.
With our digital payments ecosystem, there is an opportunity for India to build partnerships globally, to drive the creation of digital public goods for the world, and demonstrate the Indian ethos of Vasudhaiva Kutumbakam.
The author is CEO, NPCI International Payments Limited