RBI's digital payments index rises 4.45% as of September 2024

The Reserve Bank of India (RBI) has said its digital payments index (DPI) increased 4.45% to 465.33 in September 2024, up from 445.5 in March 2024. The rise in RBI-DPI was propelled by a stronger payment infrastructure and enhanced transaction efficiency across the country.

The RBI has been publishing the digital payments index (DPI) since 2021, keeping March 2018 as a base. 

Launched on January 1, 2021, the DPI was created to track the growing digital payments ecosystem across the country. The benchmark score for the base year, March 2018, has been set at 100.

The RBI-DPI consists of five parameters that assess the expansion and integration of digital payments across the nation over different periods:

Payment Enablers (weight in the index is 25%): Sub parameters include Internet, Mobile, Aadhaar, Bank Accounts, Participants and Merchants.

Payment Infrastructure – Demand-side factors (weight in index is 10%): Sub-parameters include Debit cards, Credit cards, Prepaid Payment Instruments, Customers registered– Mobile and Internet Banking and FASTags.

Payment Infrastructure – Supply-side factors (weight in index is 15%): Sub-parameters include Bank branches, Business correspondents, ATMs, PoS Terminals, QR Codes and Intermediaries.

Payment Performance (weight in index is 45%): Sub parameters include Digital Payment Systems – Value, Unique users, Paper clearing, Currency in circulation and cash withdrawals.

Consumer Centricity (weight in index is 5%): Sub-parameters include Awareness and education, Declines, Complaints, Fraud and System downtime.

The index’s movement is a key indicator that impacts economic growth, guides policy making and shapes consumer behaviour. A higher DPI indicates that the economy is making strides.

Similar metrics are being used globally to gauge the adoption and growth of digital payments. In the USA, the Federal Reserve’s ‘Federal Reserve Payments Study,’ offers a deep dive into the world of non-cash transitions, providing insights into the volume and value of different digital payment methods.

The European Central Bank (ECB) publishes its ‘Payment Statistics’ report, shedding light on the evolving digital payment trends across member countries.

In China, the People’s Bank of China (PBOC) releases statistics on electronic payments, showcasing the nation’s rapid adoption of digital transactions.