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India's digital payments rose 55 percent in fiscal 2016-17

Tinuku ~ Digital payments in India up 55 percent in fiscal 2016-17 and trends are likely to continue in the coming years. India is at a point of revolution in field of financial technology, a increase in financial year in which the government demonetised the value of currency and digital payment volume recorded an average annual growth of 28 percent from 2011-12 to 2015-16.

Tinuku India's digital payments rose 55 percent in fiscal 2016-17

"Really reflects current Indian facts at the peak of digital payments revolution, technological innovation and increased consumer satisfaction will continue to dominate the growth landscape of payments in India," said Ratan P Watal, Principal Advisor of Niti Aayog on Monday.

The overall value of payments is about 13 to 14 times of GDP over the period 2016-17. In contrast, the number of currencies in circulation is about 12 percent of GDP during 2011-12 to 2015-16 and drops to 8.8 percent during 2016-17. The growth of digital payments is very important as government has set target of 25 billion transactions by March 2018.

The Indian government has collected high-value currencies (Rs 500 and Rs 1,000) in November in currency value-demonetised policy and has promoted smaller cash economy through push for higher digital payments. Watal shows retail payments accounted for 98-99 percent of total volume.

"Analysts say the rise in digital payments post-demonetised is temporary because cash is not available, as cash is available the jump in digital payments is tapered, using RBI data to prove hypotheses," Watal said.

"These data are only published for some payment system indicators only and include card transactions of only 4 large banks that refer to a subset of the entire digital payment spectrum, therefore conclusions do not give a true picture," Watal said.

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