India has emerged as a leader in 16 categories, and strong in nine categories, totalling 25 out of the 40 benchmarks for banking payment systems among 20 countries across the world, the Reserve Bank of India has said.
The report, Benchmarking India’s Payment Status, was released on the RBI’s official website and aims to provide a comprehensive comparison between the payment ecosystems of India and the world.
A leader is ranked 1st, 2nd, or 3rd, while strong denotes the top half of the countries other than the leaders.
Some of these aspects relate to the regulation of costs of payment systems, cheque instrument features, and the availability of alternate payment systems, among others.
Two out of the 16 categories specially relate to digital payments and highlight the rapid progress and advancement India has made in this field. They have been identified as value payment systems and fast payment systems.
The pilot exercise, which was carried out in 2019, ranked India’s payment systems leader in nine and strong in six categories.
What does the report highlight?
According to the report, India reported the second-highest compounded annual growth rate (CAGR) of 21 percent (2017-2020), behind only Saudi Arabia, which registered an annualized growth of 26 percent. This, the report said, indicated India’s rapid adoption of non-cash payment systems.
With several digital payment options, such as channels for cross-border remittances, ticketing systems for public transportation, bill payments, and a decline in cheque usage, the country managed to demonstrate considerable improvement, the report added.
As for credit card usage, India reported 60.4 million credit cards, behind only countries like the US, Brazil, Turkey, Canada, Korea, and China. Conversely, in terms of debit card usage, India occupied the second spot with 868 million debit cards. China led the pack with a whopping 8,178 million cards.
Improvement Areas
The report also highlighted a few areas which need improvements, such as the infrastructure for point of sale (PoS) terminals and ATMs.
It further said that lockdowns introduced during the covid-19 pandemic encouraged an increase in the demand for cash as a store of value. Moreover, in 2020, the economy witnessed a slowdown. Both aspects contributed to India’s low rating against a few indicators based on the circulation of currency, the report said.
The report concluded that the findings of the benchmarking exercise would be used to improve the payment scenario in the country.
The countries included in the benchmarking exercise were Canada, South Korea, Sweden, China, France, Germany, Indonesia, Russia, Saudi Arabia, Australia, Brazil, Italy, Japan, Mexico, Singapore, South Africa, Turkey, the UK, and the US, among others.
