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Special Content

Issue No 38, 18 December -24 December 2021

Azadi Ka Digital Mahotsav DigiDhan Mission – Towards Cashless Economy

India is currently in the cusp of a radical paradigm transition towards the adoption of technology in the creation of a digital economy. The rapid proliferation of mobile phones across the population, as well as the rise and spread of digital technologies enabled a focussed initiative by the government for establishing a robust, secure, pan-India digital payments ecosystem which could be accessed by all sections of the population. Hence, in June 2017, the Government launched the DigiDhan Mission for the promotion of digital payments across all sectors. Since then, there has been no looking back. The total digital transaction volume has seen an exponential growth from Rs 2,071 crore in financial year 2018 to Rs 5,551 crore in financial year 2021.

The digital payments ecosystem is an extension of the Digital India program and has the potential to transform India’s economy by formalization of financial transactions. Financial inclusion has been a foremost challenge for India and DigiDhan Mission enabled access to formal financial services and benefits of ecommerce, especially for those who were excluded despite significant progress in bank-led payment system.

To commemorate the success of the DigiDhan Mission, the Ministry of Electronics and Information Technology (MeitY) recently organized the Digital Payment Utsav as part of the ongoing Azadi ka Amrit Mahotsav (celebrating 75 years of India’s Independence). The day celebrated the journey and rise of digital payments in India and brought together leaders from the Government, banking sector, fintech companies and startups. The event witnessed the unveiling of the DigiDhan logo, launch of an awareness campaign called Digital Payments Sandesh Yatra with digital payments anthem titled ‘Chutki Baja ke’ (cashless, touchless, paperless). Top Banks and Fintechs were awarded and recognized in various categories for their achievements in FY 2019-20 and FY 2020-21 towards the promotion of digital payments. During the event, MeitY also recognised the contribution of four payment system aggregators for onboarding street vendors under the PM SVANidhi Schememicro credit facility for street vendors.

DigiDhan Logo

The event saw the launch of innovative solutions like:

• Payments-on-the-Go: The City Union Bank launched Rupay-on-the-Go. With this gadget, everyone can make payments a part of their fashion accessory, something they can ‘wear’ every day, and leave the house wallet free. This innovative solution would redefine the contactless payments space by eliminating the need to carry a physical card and enabling instantaneous payments with a simple “Tap, pay, go” mechanism. RuPay On-the-Go is an interoperable, open-loop solution that customers can use at RuPay contactless-enabled PoS at retail outlets.

• Inclusive Credit for All: Credit cards represent the next big in fintech and contactless is truly the way forward. To drive it to the next level, India Post Payments Bank-Punjab National Bank, Kotak Bank, YES Bank, Indian Overseas Bank, ICICI Bank, Indian Bank, Bank of Maharashtra, and City Union Bank launched Contactless Credit cards on the RuPay network.

• Empowering Small Merchants: India has close to 1.5 crore retail stores/ Kiryana stores. Union Bank announced an android-based SOFTPOS mobile app for point of sales, which will further the cause of digital payment adoption.

What is DigiDhan?

The Digital India programme is a flagship programme of the Government of India with a vision to transform India into a digitally empowered society and knowledge economy. “Faceless, Paperless, Cashless” is one of professed role of Digital India. Promotion of digital payments has been accorded highest priority by the Government of India. The vision is to provide facility of seamless digital payment to all citizens of India in a convenient, easy, affordable, quick and secured manner through Unified Payments Interface (UPI), Unstructured Supplementary Service Data (USSD), Aadhar Pay, Immediate Payment Service (IMPS) and Debit Cards.

Ministry of Electronics & Information Technology (MeitY) has taken several initiatives to promote digital payments and achieve the targets in a mission mode. Few of them are outlined below.

• Digital payment transactions target have been assigned to Central Ministries with high citizen touch points, Public Sector and Private Sector Banks to achieve the targets

• Training and workshops on digital payments awareness with several Ministries have been conducted and planned ; MoRTH, MoHFW, Ministry of Agriculture, MSME, Department of Post, Ministry of Power, Panchayti Raj, Ministry of Defence

• Promotional materials on publicity of digital payments is being shared with stakeholders to create awareness and sensitization

• Digital Payment dashboard has been created to track and monitor the progress of digital transactions achieved by Banks

• Cash back schemes for merchants

• Aadhaar merchant incentive schemes

• Rreferral bonus schemes for individuals

Tracking DigiDhan Growth

Furthering the mission of less-cash economy requires accurate reporting, monitoring and analysis of all digital transactions occurring in the country so that development of infrastructure can be done accordingly through deployment of Physical/Mobile/BHIM Aadhaar PoS devices. MeitY has developed ‘DigiDhan Dashboard’ that helps in tracking the growth of digital payment transactions in the country and provide inputs for effective planning of digital payment promotional activities. It provides bankwise transactions’ details as well as growth pattern of various modes of transactions like BHIM, IMPS, Cards etc., in graphical form.

The DigiDhan Dashboard is the only dashboard that provides a consolidated view of over 15 digital payment modes such as Unified Payment Interface (UPI), Immediate Payment Service (IMPS), Debit Card, Credit Card, etc., from RBI, National Payment Corporation of India (NPCI) and over 100 banks, Cities, State, and Ministries. The dashboard evaluates performance of banks based on KPIs (key performance indicators) and identifies the performance of the top and bottom performing banks. In addition, the dashboard provides state-wise distribution of digital payments transactions on a per capita basis and generates Business Intelligence driven data analysis.

DigiDhan Mitra Chatbot

The dashboard also hosts a DigiDhan Mitra Chatbot. Launched in 2019, the AIbased chatbot (designed and developed by NIC) enables a text and voice-based conversation with the user, mining the DigiDhan Portal. The chatbot proactively handles user queries in real-time and helps in faster processing of user queries, leading to saving of the resource time. The chatbot supports multiple languages and can respond to user queries through customised information in the form of text, bar graphs, and charts. It can also perform voice recognition in English and Hindi.

Key Drivers

This exponential growth of the digital payment sector is driven by multiple factors including convenience to pay, the ever-growing smart phone penetration, rise of non-banking payment institutions (payments bank, digital wallets, etc.), progressive regulatory policies and increasing consumer readiness to the digital payment platform. India, currently, has third largest internet user base in the world with 300 million users. 50 per cent of these users are connected to the internet through mobile phones only and they are playing a key role in the growth story of digital payments. The advent of next-generation payment systems like payment banks, digital wallets and BharatQR, is fueling digital payments furthermore. It is projected that digital payments in India will supersede cash by 2022, according to the IDC Financial Insights report titled The Future of Payments in India: More Spectacular Growth Ahead. Another key driver of digital payments is positive policy framework changes and government initiatives like the UPI, Aadhar linked electronic payments and improvement of the digital infrastructure.


Entities involved in providing digital payment services incur costs, which are generally recovered from the merchant or the customer or are borne by one or more of the participants. While there are both advantages and disadvantages of customers bearing these charges, they should be reasonable and should not become a deterrent in the adoption of digital payments.

Considering this, Reserve Bank of India (RBI) on 8th December 2021 announced that it will issue a discussion paper that will be concentrated on the charges that customers pay on the various payments systems such as credit cards, debit cards, prepaid payment instruments (cards and wallets), UPI, etc. "The paper will also seek feedback on issues related to convenience fee, surcharging, etc., and the measures required to make digital transactions affordable to users and economically remunerative to the providers," the RBI release reads. The paper will be released in a month.

Comparison with Global Market

India is pegged to have the most evolved ecosystem of digital payments compared to 25 other countries which were surveyed by FIS, a US-based banking technology company. This included UK, China and Japan. The parameters that FIS used to measure the digital payments in these 25 countries include round-the-clock availability of the services, adoption, and immediacy of payments. FIS used the Faster Payments Innovation Index (FPII) rates of different payment system across these 25 countries on a scale of 1-5, with 5 being the highest rating. According to FPII, India’s IMPS service was the only system to get a level 5 rating, leaving behind countries like UK, Singapore, Denmark, Switzerland, China, Japan, and others. This certainly puts India’s digital payments story on an exciting track.

Compiled by EN Team

(Source: pibindia.gov.in, meity.gov.in, digipay.gov.in, ibef.org)