India tops in real time payments in 2020, pips China, US, UK

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One of the few activities that have grown in quantum leaps during the Covid restrictions in the economy since March 2020 is digital or technology-based transactions.

India tops A recent study by ACI worldwide revealed that India occupied the top spot with 25.5 billion real-time payments transactions, followed by China with 15.7 billion transactions.

ACI Worldwide is a software company that offers payment solutions to companies to process digital payments.

In 2020, the transaction volume share in India stood at 15.6% and 23% for instant payments and other electronic payments respectively. South Korea, Thailand and the UK stand after India and China with 6, 5.2 and 2.9 billion real time transactions respectively.

At a global level, the total number of real-time transactions in 2020 was 70.3 billion, up almost 41% from 50 billion in 2019.

Radhika Gupta, MD & CEO of Edelweiss mutual fund also tweeted this piece of statistics on Monday and said, ‘A list we should be proud to top.’

A list we should be proud to top! 🇮🇳 pic.twitter.com/0DwKydJfJS

— Radhika Gupta (@iRadhikaGupta) May 24, 2021

The core The study said that by 2024 the share of real-time payments volume in overall electronic transactions will exceed 50% in India. This figure is estimated to touch 72% by 2025.

RBI data also revealed that the number and amount of digital transaction went up dramatically over the last 3 years.

In FY18 the total number of digital transactions (real time, RTGS, NEFT, UPI, ECS etc.) in India stood at 146 billion with a transaction value of about Rs 1,39,986 billion. In FY19 these two figures went up to 234.43 billion and Rs 1,63,852 billion respectively. The next year in FY20 the figures stood at 343.50 billion and Rs 1,63,100 billion.

Hindrances A recent study by Price Waterhouse Coopers (PWC) also revealed that till October 2020 only 11-12% of the country’s population were digitally literate, which means out of a population of 1.30 billion, the number of digitally literates is between 0.14 and 0.156 billion.

A national digital literacy mission study also revealed that a 360-degree holistic approach on the part of the government is required to bring more people under the ambit of digital transaction.

The PWC study revealed that almost all the leading banks are facing some degree of outage during digital transactions. It mentioned that between April 1, 2020 and April 1, 2021 customers of the State Bank of India faced outage 68 times. In other words, SBI customers, on an average, faced glitches 5.5 times a month.

Private banks were better placed on this parameter. ICICI Bank customers faced it 21 times a year. The number for an average HDFC customer was 18 times over a period of one year.

Expert take “Banks and financial institutes in India need to reprioritise and fix their core infrastructure. The need of the hour is intent and speed to do so,” said Vivek Belgavi, a partner and leader of the FinTech practice at PwC India.

“India’s journey of creating a digital financial infrastructure has been characterised by collaboration between the government, the regulator, banks, and fintech. This has helped to advance the country’s goal of enabling financial inclusion. The pandemic has further accelerated the adoption of digital payments,” said Kaushik Roy, VP, and head of product management, Asia, ME, and Africa, ACI Worldwide.