Despite missing its target for digital payments for two consecutive years, the government has optimistically set a target of 40 billion e-transactions for FY20. That's a jump of 33 per cent over last year's target of 30 billion, which was reportedly missed by about 4 billion.
To ensure that the latest target is met, the Ministry of Electronics and Information Technology (MeitY) has assigned fixed goalposts for the various players in the business. While SBI has been given a target of 7.7 billion transactions, Paytm has to deliver 5 billion digital transactions through its payments bank and popular mobile wallet, sources in the know told The Times of India. They added that private banks HDFC Bank and ICICI Bank are expected to chip in with about 2.5 billion and 2.8 billion transactions, respectively.
As the country readies for the Modi 2.0 government to take charge, speculation is rife that all of NDA's pet schemes and initiatives will see renewed focus, including Narendra Modi's dream of a cashless India. "Once the swearing-in of new ministers takes place, things will further accelerate," said a source.
While banks will be the biggest catayst for spurring on digital payments - which is why they have reportedly been asked to deploy 8.5-million point of sales (PoS) terminals in the rural areas and the northeastern states alone - mobile wallets and the Unified Payment Interface (UPI) will also play a key role.
The total count for UPI transactions in 2018 reportedly stood at 3 billion. In January, the National Payments Corporation of India (NPCI) announced on its official Twitter handle that the value of UPI transactions had seen a 25% increase (month-on-month) to cross the Rs 1 lakh crore milestone in December for the first time. The numbers continue to mushroom: In March, it saw 800 million transactions through its network, dipping slightly to around 782 million transactions last month.
Sources told the daily that the FY20 targets are ambitious but achievable as UPI adoption is stronger than ever now and it has emerged as a leading choice of digital payments among top-tier internet users in the metro cities. According to Ankur Pahwa, partner and national leader (e-commerce and consumer internet), EY India, the focus on digital payments will only accelerate going forward and "UPI will continue to lead the digital payments stack in India".
To push digital payments, regulatory bodies like the RBI, IRDAI and Sebi are set to come up with regulatory sandboxes to work and test new technologies in the market. Earlier this month, the banking regulator released its latest vision document for payment and settlement systems, which outlines the road map for 2019 to 2021. The core theme of the document is 'Empowering Exceptional (E)payment Experience', and the aim is to achieve "a highly digital and cash-lite society" through the four goal posts, namely competition, cost effectiveness, convenience and confidence.
Among the specific outcomes listed in the vision document, the RBI sees payment systems like IMPS/UPI registering average annualised growth of over 100% and NEFT at 40% till 2021. The number of digital transactions is expected to increase more than four times to over 87 billion in the same time frame.