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Consolidated progress chart of all payment instruments

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Payments instruments in India

Aadhaar-enabled Payment System (AePS)

Note: The total includes Onus and Offus transactions, excluding uncategorized transactions.

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Quarterly trends for the selected payment instrument

IPPB, a key player driving AePS transactions, has revised its AePS service charges:

    • India Post Payment Bank (IPPB) has been driving a large volume and value of AePS transactions. In the past two years, most of these transactions were for government-to-person (G2P) payments in...
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  • DFS is in talks with the NPCI to extend AePS services to all the 800+ cooperative banks in the country:

    • About 40 cooperative banks in India are currently part of the AePS ecosystem and offer AePS-based services to their customers. The Department of Financial Services (DFS) plans to widen...
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  • A new security feature to the AePS infrastructure will improve the authentication and security of transactions:

    • The Unique Identification Authority of India (UIDAI) has introduced a new security feature to AePS point-of-sale (PoS) devices called “fingerprint liveliness” as part of a software...
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  • Prepaid Payment Instruments (PPIs)

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    Quarterly trends for the selected payment instrument

    NPCI's latest wallet interoperability norms intend to benefit PPI or wallet issuers but may cause friction between customers and merchants:

    • In a press release dated 29th March 2023, the National Payments Corporation of India (NPCI) announced that starting April 2023, it will allow wallet and PPI operators to...
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  • The RBI’s latest regulation on non-compliance and penalties has disrupted the “buy-now-pay-Later (BNPL)” market:

    • Digital wallets and prepaid card operators have grown in the past few years. Many of these PPI operators also provide BNPL services, which are credit lines or pre-set borrowing limits that allow...
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  • PPI wallets with UPI linkage to be issued to foreign travelers to permit them to make digital payments in India:

    • The RBI announced a facility to make digital payments easy for foreign travelers, The facility enables all inbound travelers visiting India to make local payments using...
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  • Unified Payments Interface (UPI)

    Note : P2P and P2M bifurcation unavailable till March '20. We can assume
    that majority of the total transactions were P2P in nature.

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    Quarterly trends for the selected payment instrument

    NPCI recently launched UPI Lite and RuPay card linkage with UPI; Paytm Payments Bank and HDFC Bank are among the early adopters to facilitate these features to customers:

    • One of the features is “UPI Lite,” which allows users to conduct transactions using an “on-device” wallet and not from a linked bank account. Users will have to add money to...
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  • UPI activation is now possible with Aadhaar instead of debit cards:

    • Many people in India have a bank account but do not use debit cards. These people have so far failed to use UPI, as providing the details of a valid debit card...
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  • India’s UPI and Singapore’s PayNow’s partnership is a crucial development in the nation’s cross-border imperative:

    • India’s retail payment system UPI and its equivalent network in Singapore called PayNow partnered in February 2023 to enable faster remittances between India and Singapore. The...
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  • Credit card

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    Quarterly trends for the selected payment instrument

    Credit card issuance on the rise; monthly spendings cross INR 1 trillion mark:

  • RuPay credit card linkage on UPI to boost merchant adoption:

    • Indian merchants, especially micro and small merchants, are set to adopt credit card transactions as RuPay credit cards go live on UPI. Starting in 2020, the RBI has instructed banks in India...
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  • RBI issued new rules on the issuance of credit cards:

    • As per the notification, scheduled commercial banks (SCBs) and urban cooperative banks (UCBs) with a net worth of INR 1 billion and more are solely authorized...
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  • Debit card

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    Quarterly trends for the selected payment instrument

    The total number of cards issued in India crossed the one billion mark, with debit cards having a 92% share:

    • The total number of debit cards in circulation in India reached 940 million by the end of 2022, forming the majority share of the total number of cards...
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  • Customers moving small ticket-size transactions to UPI has led to an industry-wide fall in debit card transactions:

    • Many Indians are moving away or have already moved away from debit cards. They are among a growing user base that has widely embraced UPI payments over debit card...
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  • Cardless cash withdrawal at ATMs—a feature making it less relevant for Indians to issue and carry physical debit cards:

    • Using the cardless ATM feature is similar to using a mobile wallet to pay at a store. In India, certain banks like the State Bank of India (SBI), HDFC...
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  • Immediate Payment Service (IMPS)

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    Quarterly trends for the selected payment instrument

    Credit card users can now use the IMPS-P2A feature to repay their credit card bills:

    • As of date, users can use IMPS to carry out peer-to-peer (P2P) or peer-to-merchant (P2M) payments. Moreover, they can also use the IMPS-P2A (peer-to-account) feature to make repayments against their credit...
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  • RBI’s push to further fuel IMPS’ growth:

    • In Q4 CY 2021, RBI announced new policy measures for IMPS, including other online and offline payment modes. In one of its policy measures, RBI proposed to increase the...
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  • Petition filed to issue FIRC for foreign exchange transactions to control black money generation:

    • A lawyer practicing in the Supreme Court of India has filed a petition seeking to issue a Foreign Inward Remittance Certificate (FIRC) to every international transaction...
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  • Bharat Bill Payment System (BBPS)

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    Quarterly trends for the selected payment instrument

    BillAvenue, a platform specializing in assisted online bill payments, adds 1 million agents; targets reaching 5 million agents by 2025:

    • BillAvenue is an online bill payments platform that continues to dominate more than 90% of the biller market share within BBPS. BillAvenue claims to have onboarded more than 1...
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  • BBPS is set to support all non-recurring payments and collection requests as well:

    • BBPS currently does not support non-recurring payments or collection requirements of individuals even if they are recurring. For example, professional service fee payments, education fees, tax payments, rent collections, and other payments...
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  • Users can now use BBPS to prepay against their loans:

    • While BBPS users already had the option to pay their EMIs through BBPS, now they can also prepay their loans. NPCI has already rolled out this...
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  • Cheque Truncation System (CTS)

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    Quarterly trends for the selected payment instrument

    E-cheques still remain a farfetched concept as a replacement for physical cheques:

    • Paper cheques enjoy immense popularity but are sometimes considered inefficient financial instruments due to fraud and efforts related to physical issuance and deposits, among other reasons. Moreover, a large number of...
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  • Cheques are a primary option for those who tend to make high-value payments:

    • Cheques provide their users with the advantage of making transactions above INR 1 million, which is a limitation for most of the other commonly-used digital payment channels, as of now. Because of...
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  • RBI tightening regulations under the CTS may further bring down cheques’ transaction metrics:

    • Earlier, banks could seamlessly process cheques with values under INR 500,000 while having the option to reconfirm the cheque and payment details with the cheque issuer before processing the...
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  • BHIM Aadhaar Pay (BAP)

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    Quarterly trends for the selected payment instrument

    Despite being a unique product, BAP is yet to reach its optimal performance:

    • The adoption of BAP was sub-par with an average monthly transaction volume of ~1.6 million during Q4 CY 2022. The low adoption was despite a strong use case that allows customers...
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  • BAP’s uptake is almost negligible in urban and semi-urban regions while inching toward growth in rural India:

    • A lukewarm push from banks, lack of obvious customer demand, non-compatibility of biometric scanners, and the initial CAPEX required by merchants to facilitate biometric devices continued to slow BAP’s progress. In urban...
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  • BAP faces competition from other payment instruments:

    • Cash and UPI-based offline QR-based transactions like UPI Lite continued to give stiff competition to BAP as these tend to be customers’ first choices for making P2M payments. Moreover,...
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  • Cash

    You can click on any of the elements in the legend above to show or hide the corresponding instrument

    Quarterly trends for the selected payment instrument

    Cardless cash withdrawal at ATMs to increase convenience for customers:

    • Micro-payments via UPI have become the norm across the country. Similarly, in May 2022, the RBI announced the introduction of interoperable cardless cash withdrawals (ICCW) at ATMs using...
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  • RBI mandates Aadhaar or PAN on cash deposits or withdrawals above INR 2 million:

    • Amid the increasing efforts toward customer protection in India, the government mandated users to quote either the Permanent Account Number (PAN) or Aadhaar for depositing or withdrawing more than...
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  • Despite the uptick in digital payments, cash maintains its share in total transactions. However, cash is not king anymore:

    • December 2022 saw a total cash withdrawal of INR 3 trillion, whereas, if we compare it against the most popular digital payments mode in India—UPI, cash...
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  • National Electronic Funds Transfer (NEFT)

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    Quarterly trends for the selected payment instrument

    SFBs providing unlimited NEFT transactions to their customers:

  • MFIs and banks driving volumes:

    • Almost all microfinance institutions (MFIs) in India now use cashless modes to disburse loans to their customers. According to a KPMG report, MFIs disburse 88% of loans through NEFT...
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  • The government’s move to introduce 96% of post offices to the core banking system will further aid NEFT’s growth:

  • *99# (USSD-based mobile banking service)

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    Quarterly trends for the selected payment instrument

    USSD saw a reduction in transactions compared to its initial years:

    • The transaction volume and value in Q4 CY 2022 showed a Q-o-Q increase of 6% and 3%, respectively. However, the low numbers in *99# (USSD) transaction volumes and values suggest its...
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  • The low-profit margin for different stakeholders leads to further disinterest:

    • Running the USSD service involves costs like SMS costs and payment service provider (PSP) fees, among others. Currently, telecom operators bear these costs. They are reluctant to further provide...
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  • UPI 123Pay has the potential to replace USSD as a feature-phone-friendly payment system:

    • The core pillar of UPI 123Pay is based on the interactive voice response (IVR) model. This payment mode will not require any tech-heavy interaction from the users’ side, where...
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  • National Automated Clearing House (NACH)

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    Quarterly trends for the selected payment instrument

    NACH is on a path of constant growth:

    • The transaction volume and value in Q4 CY 2022 showed a Y-o-Y growth of 19% and 42%, respectively. NACH has seen an increase in the volume of recurring payments due to...
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  • Though lenders and other FSPs play a crucial role in NACH’s growth, they still witness higher transaction bounce rates:

    • NACH makes it easier for FSPs to collect payments from their customers. This has led to its increased adoption by FSPs like banks or microfinance institutions (MFIs) to collect loan repayments and...
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  • RBI increasing the mandated limit for NACH transactions may result in a higher value of transactions:

    • As per the latest RBI Monetary Policy Committee report, it plans to increase the NACH mandate limit for Trade Receivables Discounting System (TReDS) settlements from INR 10 million to...
    • Read More
  • e-RUPI - Prepaid e-voucher

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    Compare the progress of different payments instruments

    • AePS

    • PPIs

    • UPI

    • Credit Card Image

      Credit Card

    • Debit Card

    • IMPS

    • BBPS

    • CTS

    • BAP

    • Cash

    • NEFT

    • *99#

    • NACH

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    You can click on any of the elements in the legend above to show or hide the corresponding instrument

    Drag an instrument’s icon from the carousel above and drop it into any of the three boxes to compare them

    Use the checkboxes to select and compare up to three instruments

    You can click on any of the elements in the legend above to show or hide the corresponding instrument

    Drag an instrument’s icon from the carousel above and drop it into any of the three boxes to compare them

    Use the checkboxes to select and compare up to three instruments

    You can click on any of the elements in the legend above to show or hide the corresponding instrument

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