## Digital-Journeys: India embraces mobile money

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**Canonical URL:** [Digital-Journeys: India embraces mobile money](https://www.imf.org/en/publications/fandd/issues/2022/09/digital-journeys-india-embraces-mobile-money-kearns-mathew)

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## Bibliographic details
- Authors: Jeff Kearns, ASHLIN MATHEW
- Published: September 1, 2022

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### Overview
- Title: India Embraces Mobile Money
- Authors: Jeff Kearns, Ashlin Mathew
- Publication: F&D Magazine
- Date: September 2022
- Central theme: The Reserve Bank of India (RBI) played a key role in the rapid expansion of India’s digital payment ecosystem, with particular emphasis on the Unified Payments Interface (UPI) and complementary public digital infrastructure.

### Growth of digital payments and UPI
- India’s digital payment volume has climbed at an average annual rate of about 50 percent over the past five years.
- UPI expansion has been about 160 percent annually.
- Transactions more than doubled, to 5.86 billion, in June from a year earlier.
- Number of participating banks jumped 44 percent, to 330.
- Values nearly doubled in the same period.
- UPI was introduced in 2016.
- RBI in March introduced a UPI for feature phones that can potentially connect 400 million users in distant rural areas.
- NPCI genesis dates to 2006, when the RBI and Indian Banks’ Association jointly formed the National Payments Corporation of India (NPCI).

### Unique digital infrastructure: India Stack and interoperability
- India Stack: a digital identity and payment system built on an open application programming interface (API).
- Aadhaar national identity program incorporated into services; Aadhaar has 1.3 billion users.
- Open-stack technology is the foundation of UPI and enables rapid integration by private fintech firms alongside public sector banks.
- NPCI described as an umbrella institution for digitalization of retail payments, incorporated as a nonprofit intended to provide India’s people a public good.

### Financial inclusion, market players, and user adoption
- NPCI CEO Dilip Asbe projections:
  - Growth for individual digital payment users is set to triple in five years to 750 million.
  - Merchant users could double to 100 million.
- UPI is described as nearly free today for consumers in India; government provides incentives for promotion of UPI merchant payments.
- Paytm reported users: more than 400 million.
- Example user behavior:
  - Entrepreneurs and small businesses use Paytm, Razorpay, and Google Pay for sales and transfers.
  - Pandemic accelerated contactless digital transactions, especially for small amounts.

### Policy signals and central bank digital currency (CBDC)
- RBI is exploring a central bank digital currency (CBDC) to meet monetary policy objectives of financial stability and efficient currency and payment operations.
- RBI Deputy Governor Rabi Sankar said a digital rupee would have big implications for crypto assets: “CBDCs could actually be able to kill whatever little case there could be for private cryptocurrencies.”
- Expected CBDC advantages cited: currency management, settlement risk reduction, and cross-border payment improvements.
- RBI’s approach: foster a varied ecosystem of payment systems (examples include RuPay, the National Financial Switch, and payment system using the national identity program to reach underserved areas).

### Key statistics and dates (verbatim)
- average annual rate of about 50 percent
- about 160 percent annually
- 5.86 billion (transactions in June, year-over-year)
- 44 percent (increase in participating banks)
- 330 (number of participating banks)
- 400 million (potential users reachable by UPI for feature phones)
- 2016 (UPI introduced)
- 2006 (NPCI formation)
- 1.3 billion (Aadhaar users)
- 750 million (projected individual digital payment users)
- 100 million (projected merchant users)
- more than 400 million (Paytm users)

*Source: F&D Magazine article "India Embraces Mobile Money" by Jeff Kearns and Ashlin Mathew, September 2022.*

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## Content in this bundle

- **India Embraces Mobile Money**
  - [India Embraces Mobile Money (Markdown version)](/-/media/files/publications/fandd/article/2022/september/digital-journey-india.pdf.md){rel="alternate" type="text/markdown"}
  - [India Embraces Mobile Money (PDF)](/-/media/files/publications/fandd/article/2022/september/digital-journey-india.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/fandd/issues/2022/09/digital-journeys-india-embraces-mobile-money-kearns-mathew_