DATA STORY : Digital Payments Index

Published
8th Jan, 2022

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What is Digital Payments Index?

It is a semiannual index published by RBI with an aim to capture the extent of digitization of payments across the country.
The index consists of 5 broad parameters which have sub-parameters which, in turn, consist of various measurable indicators. The major 5 broad parameters are -
- Payment Enablers- 25%
- Payment Infrastructure: Demand-side factors (10%)
- Payment Infrastructure: Supply-side factors (15%)
- Payment Performance- (45%)
- Consumer Centricity- (5%)
Each indicator has various sub-parameters as listed in table below-

Payment Enablers	Payment Infrastructure- Demand-side factors	Payment Infrastructure- Supply-side factors	Payment Performance	Consumer Centricity
25%	10%	15%	45%	5%
Internet	Debit cards	Bank Branches	Digital Payments Systems-Volume	Awareness and education
Mobile	Credit cards	Business Correspondents	Digital Payments System-Value	Declines
Aadhar	Prepaid Payment Instruments	ATMs	Unique Users	Complaints
Bank Accounts	Customers registered-Mobile and Internet Banking	PoS terminals	Paper Clearing	Frauds
Particpants	FASTag	QR Codes	Currency in Circulation	System Downtime
Merhants		Intermediaries	Cash withdrawals

Key findings from the latest DPI-

The base period for the index is March 2018 e. DPI score for March 2018 is set at 100. The score for succeeding years are-
- March 2018 – 100
- March 2019 - 153.47
- March 2020 - 207.84
- March 2021 - 270.59
The significant growth in the index represents the rapid adoption and deepening of digital payments across the country in recent years.

Question- Digital payment index by RBI has provided an opportunity to measure the penetration of digital payments in the country. Discuss the features of the index, recent findings and measures to promote digital payment in India.