RBI recently published a report on its vision for payments by 2025.
Here’s some highlights from the same :
i. Volume of cheque-based payments to be less than 0.25% of the total retail payments;
ii. More than 3x increase in number of digital payment transactions;
iii. UPI to register average annualised growth of 50% and IMPS / NEFT at 20%;
iv. Increase of payment transaction turnover vis-à-vis GDP to 8;
v. Increase in debit card transactions at PoS by 20%;
vi. Debit card usage to surpass credit cards in terms of value;
vii. Increase in PPI transactions by 150%;
viii. Card acceptance infrastructure to increase to 250 lakh;
ix. Increase of registered customer base for mobile based transactions by 50% CAGR;
and x. Reduction in Cash in Circulation (CIC) as a percentage of GDP.
UPI transactions have been growing by leaps and bounds at the cost of other retail payments, especially card transactions. One of the reasons for its popularity is the convenience and seamless experience it offers to users. Currently, a UPI user can only link the bank account (savings / current account) and the debit card to the UPI Virtual Payment Address (VPA). To offer more avenues and greater convenience to users in making payments through UPI platform, feasibility of linkage of credit cards and credit components of banking products to UPI shall be explored.
Considering emerging concerns with OTP-based authentication in terms of increasing cases of phishing / vishing / smishing modes for divulgence of customer confidential details, alternate risk-based authentication mechanisms leveraging behavioral biometrics, location / historical payments, digital tokens, in-app notifications, etc., shall be explored.
The money market and capital market currently operate at fixed hours. However, the RTGS and NEFT payment systems which enable settlements in these markets, operate on a 24x7 basis. With a view to leverage the availability of payment systems on a 24x7x365 basis, extension of trading hours of these markets to enable longer market availability for trading and settlement shall be facilitated, in conjunction with the concerned market departments of the Reserve Bank. This shall enhance efficiency and further price discovery in these markets.
BigTechs and FinTechs play an invigorating role in onboarding new users and customising payment experience. Given their increasingly dominant role in payments ecosystem, a discussion paper on the need for proportionate regulation by the Reserve Bank encompassing domestic incorporation, reporting, data use, etc., shall be published.
BNPL services have developed into a new payment mode alongside the existing payment modes like cards, UPI, and net banking. This channel, facilitated by a few payment aggregators, leverages the existing nodal account (escrow account after authorisation) to route payments between a BNPL customer and a merchant. This novel method shall be examined, and issuance of appropriate guidelines on payments involving BNPL shall be explored.
The potential of UPI has been recognised world over by numerous authorities. Reserve Bank shall actively support the global outreach initiatives to expand the footprint ofdomestic payment systems by collaborating with relevant stakeholders (e.g. Central Banks,BIS, World Bank, other institutions, etc.).
Which ones are you looking forward to the most among the above objectives of RBI ?