G-20 News

Payments Vision 2025: RBI expects UPI to see average annualized growth of 50%. 10 point wrench

The Reserve Bank of India (RBI) on Friday released “Payments Vision 2025” for India with the aim of providing every user with safe, secure, fast, convenient, accessible and affordable electronic payment options. During this vision period, RBI aims to triple digital payment transactions. The UPI system is expected to register an average annualized growth of 50% over the period.

In its statement, RBI said that the Payments Vision 2025 document is presented through the five anchor pillars of integrity, inclusion, innovation, institutionalization and internationalization. Resilience to operational and security issues would remain central to resisting and recovering from the changing threat landscape. The integrity of payment systems must be non-negotiable to build customer confidence.

“With the shift/evolution of customer behavior towards digital and contactless payment methods, in part due to CoVID, there is a 50% spike in mobile banking users, indicating the inclusion of new users into the digital fold. The challenge of making this an irreversible change, possibly seeking convenient and personalized payment solutions, would be pursued,” added RBI.

Taking into account current geopolitical developments across the world, the Payments Vision 2025 document also seeks to address potential risks arising from any adverse situation that may arise.

RBI has proposed various initiatives under the five objectives. And through these initiatives, RBI aims to achieve ten expected results during the Vision period.

These are:

1. Check payment volume should represent less than 0.25% of total retail payments.

2. More than 3x increase in the number of digital payment transactions.

3. UPI will register an average annualized growth of 50% and an IMPS/NEFT growth rate of 20%.

4. Increase in payment transaction revenue to GDP to 8.

5. 20% increase in point-of-sale debit card transactions.

6. Using debit cards to surpass credit cards in value.

7. 150% increase in prepaid payment instrument (PPI) transactions.

8. Card acceptance infrastructure will increase to 250 lakh.

9. 50% increase in registered customer CAGR for mobile transactions.

10. Reduction of Cash in Circulation (CIC) as a percentage of GDP.

RBI said: “More than 26 million digital payment transactions are processed daily by our payment systems, of which the Unified Payments Interface (UPI) system itself processes more than two-thirds.

Furthermore, RBI added that India is the largest recipient of inbound remittances in the world. The increased interest shown by major countries in the world in India’s IPU could accelerate the growth of trade and commerce with partner countries while reducing the speed and cost of remittances. With the explosion in the number of outbound tourists from India, the proliferation of Indian payment products abroad would provide a seamless experience for Indian travelers.

Payments Vision 2025 builds on India’s efforts and builds on the G-20 goal to improve cross-border payments by addressing the four main challenges of cost, speed, access and transparency.

To subscribe to Mint Bulletins

* Enter a valid email

* Thank you for subscribing to our newsletter.