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Informist, Monday, Jan. 27, 2025

 

--RBI releases Payment System Report for half-year ended December 

--RBI: Will publish Payment System Report on a half-yearly basis

 

NEW DELHI/MUMBAI – The Reserve Bank of India Monday released its Payment Systems Report for the six months ended December. The central bank said in a release that it would publish the report on a half-yearly basis from now.

 

"This report, in addition to analysing the trends in payment transactions carried out using various payment systems in India during the last five calendar years up to 2024, covers important developments in the payment ecosystem and provides an in-depth analysis into UPI (Unified Payments Interface)," the release said.  

 

The payment systems report highlights the improvements in domestic payment systems. It noted that while domestic payments systems have become faster and more affordable in recent years, cross-border payments still face considerable challenges in terms of high costs and slow processing times. In response, the RBI is working on linking India's fast and efficient payment systems with those of other countries to create a seamless and cost-effective cross-border payment experience.

 

The report noted that this focus aligns with global initiatives to address the issues of high cost, low speed, limited access, and lack of transparency in cross-border payments. Giving the example for the same, the report added, "Last year, the Unified Payments Interface of India (UPI) and PayNow of Singapore were interlinked through extensive collaboration between RBI and Monetary Authority of Singapore." 

 

The report also delved into the growth of credit and debit card systems, as well as prepaid payment instruments in India. According to the report, by the end of December, the number of credit cards in circulation had more than doubled to around 108 million, compared with 55.3 million in December 2019. This sharp increase reflects growing consumer adoption of credit card payments, the report added.

 

However, the number of debit cards has remained relatively stable, with a slight increase from 805.3 million in December 2019 to just over 990.9 million in December 2024, the report said. Additionally, card transactions have followed a similar growth trajectory, reflecting the increased usage of both credit and debit cards across the country.

 

In addition to card payments, the report examines trends in inward and outward remittances to and from India. According to the World Bank's 2023 global remittance report, India continues to lead the world as the top recipient of remittances, with an estimated $125 billion flowing into the country. This amount outpaces remittance inflows to other countries such as Mexico and China, underscoring the role of India's diaspora in supporting the nation's economy and contributing to foreign exchange reserves, the report said.

 

The report also noted that the cost of sending remittances to South Asia remained the lowest globally, although it still exceeds the target set by the Sustainable Development Goals. India's position as a key player in global remittance corridors is also underscored, with the payment systems report noting that the Malaysia-to-India corridor is the most cost-effective for sending remittances.

 

Another aspect covered in the report was the growth of UPI payments. The report reveals that as more merchants on-board the UPI platform and payment acceptance infrastructure expands, the growth in person-to-merchant transactions has outpaced the growth in person-to-person transactions.  End

 

Reported by Sachi Pandey and Aaryan Khanna

Edited by Akul Nishant Akhoury

 

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