New Delhi : In the last three years, digital transactions have surged in such a fashion in India that cash usage, which still accounts for 60 percent of consumer expenditure (as of March 2024) is rapidly declining, according to a paper by the Reserve Bank of India (RBI) economist. Pradip Bhuyan from the Reserve Bank’s department of currency management wrote in the paper that the share of digital payments more than doubled from 14-19 percent in March 2021 to 40-48 percent in March 2024, with unified payments interface (UPI) playing a key role. Cash or currency in circulation (CIC) represents the total notes and coins in circulation in the economy while currency with the public (CWP) is defined by CIC minus cash with banks, and accounts for around 95-97 per cent of CIC.
According to the RBI paper, in recent years, significant growth has been observed in retail digital payments (RDP), which is the total digital payments except for payments through real-time gross settlement. Launched in 2016, UPI accounted for the highest share of RDP in volume in the last five years. “From 2021-22 to 2023-24 (post Covid-19 period), the growth in UPI in volume was higher than that in value.
Consequently, the average size of UPI transactions decreased from Rs 1,838 in 2020-21 to Rs 1,525 in 2023-24,” the paper noted. “The share of P2M (person to merchant) payments in total UPI transactions increased from 16.6 percent in April 2021 to 26.
2 percent in March 2024 in value,” it added. In vo.