Digital Payments in India grew by 13.24 per cent in a year through March 2023, as shown by the Reserve Bank of India’s Digital Payments Index (RBI-DPI).

The index rose to 395.57 in March 2023 from 377.46 in September 2022 and 349.30 in March 2022.
As per the data released by the apex bank, digital payments in India have witnessed a consistent spike from 2018, the base year for measurement.
For 2023, as stated by RBI, the Digital Payments Index has increased across all parameters driven by significant growth in payment infrastructure and payment performance across the country, over the period.

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The RBI introduced the Digital Payments Index comprising five broad parameters that enable the measurement of the deepening and penetration of digital payments in the country over different periods.

The apex bank had considered 2018 as the base year for measuring the index with the DPI score for March 2018 set at 100.
Parameters that are considered in the measurement of the index are payment enablers (weight 25 per cent), payment infrastructure demand-side factors (10 per cent), payment infrastructure supply-side factors (15 per cent), payment performance (45 percent), and consumer centricity (5 per cent).
The index is published on a semi-annual basis from March 2021 onwards with a lag of four months.
India has significantly adapted the Digital Payment mechanism, especially post-pandemic. This is evident from the surge in RBI-DPI for March 2021 at 270.59, which was 207.84 for March 2020.
UPI has also played a key role in the DPI surge with many tie-ups in the field of UPI and Credit Cards happening recently, pushing the use of UPI in the market.
UPI’s dominance is evident from the fact that it drives 75 per cent of total retail transactions.
Another key factor that will be crucial in the digital payments penetration for India is the internationalisation of UPI. Recently, India has tied up with Singapore, UAE, Indonesia, Sri Lanka, and France for the use of UPI in these countries.
Even the visitors from G20 nations coming to India were also allowed to use UPI for payments when in India. This development was crucial as India was holding the presidency of the G20 meeting this year.

With customers increasingly adopting digital payments, even for small-value transactions, the index underscores the need for form-factor agnostic accessibility to include the financially underserved within the formal financial system.

Emphasizing the significance of fintech in promoting growth and financial inclusion through relevant products, the RBI-DPI insights provide valuable guidance in achieving financial inclusion targets expeditiously.