The shift of the Indian economy from 'cash' to 'cash-less'

With the increase in online payments, cash withdrawals from ATMs have also come down. 1908

The Indian economy is now moving at a steady pace towards becoming a digital economy. This is due to various online payments and digital lending applications, net banking, growing number of smartphone users and increasing penetration of internet service. Yes, governments and banks and financial institutions are also promoting the digital payment ecosystem. A feature has also been introduced that allows mobile users other than smartphones to make online payments even without internet. The calendar year 2021 has been a pivotal year for India in terms of digital payments.

Huge growth in the number of debit-credit cards

The number of debit-credit card users in India is growing rapidly. According to the India Annual Digital Payments Report-2021, the total number of cards in circulation in the country has crossed the 1 billion mark for the first time by December 2021 and reached 100.5 crore. Of these, the number of credit cards has increased by 15 per cent to 3.08 crore and the number of debit cards has increased by 9 per cent to 4.5 crore. However, it is not clear how many of these cards, especially debit, are active and whether they are being used for cash withdrawals or payments. The share of private banks in the credit card market is 9% and that of state-owned banks is 5%. Out of the total debit cards, 31% cards have been issued by private banks and 5% by government banks. It is believed that even under Pradhan Mantri Jandhan Yojana, the share of government banks in issuing debit cards to a large number of account holders has increased. 25 million debit cards have been issued for this scheme.

Both the number and amount of card transactions increased

In the year 2021, the number of transactions through various cards has increased in terms of both quantity and amount. Of this, Rs 2.15 billion was transacted through credit cards. 2.5 lakh crore has been transacted. In which the average ticket size per transaction for the year 2020 is Rs. 5 to Rs. 319 has been done. So in the year 2021, the average amount withdrawn from bank ATMs through debit card has decreased by 3% to Rs. 1908 while in the year 2020 this amount is Rs. Was 3. It is clear here that in the year 2021, people have withdrawn less cash from ATMs. Although the average ticket size and transaction value is higher than debit cards, credit cards are the first choice for payment. Interestingly, credit cards are preferred over debit cards when it comes to online payments.

UPI Rs. 3 lakh crore transactions

The trend of online payments through Unified Payments Interface (UPI) has grown rapidly in India following the earlier note ban and subsequent Corona epidemic. In the year 2021, the number of online transactions through UPI has increased by 104 per cent to 2.4 billion and in terms of value, UPI has raised Rs. 6.5 lakh crore has been transacted which shows a tremendous growth of 111 per cent. In the last quarter of 2021, the volume and value of UPI transactions have increased by 100% and 5% respectively. An average of Rs. 3 has been transacted. The number of point-of-sale terminals (PSTs) has been steadily increasing and by the end of December 2021, the total number has increased by 12% to 2.4 lakh. So the total number of QR codes in the country has increased by 8% to 4.5 lakh.

In 2021, categories such as grocery stores, restaurants, garment showrooms, pharmacy-medical stores, hotels, jewelery retail, specialty retail, home appliances and department stores accounted for more than 50% of total value in terms of online transactions. The country has seen a tremendous increase in online transactions due to the festival season from October to December, when sanctions were relaxed after the Corona epidemic subsided.

In the year 2021, the total number of financial transactions through mobile wallet reached 6 billion and it has a total of Rs. 3.1 lakh crore has been transacted. Thus, the number and amount of transactions through mobile wallet has increased by 3% and 3% respectively last year. The number of mobile app-based transactions rose 104 per cent to 2.10 billion. Through which Rs. 12.31 crore digital transactions have been made which shows an increase of 3% on an annual basis. The average amount transacted from a mobile wallet is Rs. Was 3.

Landmark in the year 2021 regarding digital payments

The total number of cards in circulation in 2021 crossed 1 billion

The number of UPI transactions increased by 106 per cent to Rs 3.5 billion, while the value increased by 111 per cent to Rs. 2.5 lakh crore

108% increase in volume for mobile app based transactions

15% increase in internet based payment volume

The average credit card ticket size increased by 15% to Rs. 319 happened

The average withdrawal from a debit card is reduced by 3% to Rs. 1908