From UPI to e₹: RBI's Annual Report showcases India's digital payment advancements

India and Mauritius, and between India and Sri Lanka. This connectivity aims to facilitate <a id=\"20151783\" type=\"General\" weightage=\"20\" keywordseo=\"cross-border-payments\" source=\"keywords\" class=\"news-keywords\" href=\"\/tag\/cross-border+payments\">cross-border payments<\/a>, enhancing trade relations and providing seamless payment options for import and export transactions.<br><br><strong>Public Tech Platform for Frictionless Credit<\/strong><br><br>In a bid to enhance efficiency, reduce costs, and streamline disbursem*nt, the RBI developed a public tech platform for frictionless credit (PTPFC). Launched in August 2023, this platform builds on pilots in digital kisan credit cards (KCC) and digital dairy projects, and aims to expand its scope to include more products, data providers, and lenders.<br><br><strong>Regulatory Measures and Security Enhancements<\/strong><br><br>To bolster security and customer confidence, the RBI extended the Central Payments Fraud Information Registry (CPFIR) to include local area banks, cooperative banks, regional rural banks, and non-scheduled urban cooperative banks. Additionally, a risk-based authentication mechanism is being introduced as an alternative to SMS-based one-time passwords (OTP), addressing risks in payment authentication.<br><br><figure class=\"img_container\" style=\";margin-bottom:5px;max-width:100%;\"><img width=\"590\" height=\"442\" class=\"unveil\" loading=\"eager\" style=\"width:100%;max-height:100%\" src=\"https:\/\/img.etb2bimg.com\/files\/cp\/upload-1716885554-etbfisi-default.webp\" data-src=\"https:\/\/etimg.etb2bimg.com\/photo\/110561678.cms\" captionrendered=\"1\" alt=\"Source: RBI\"><figcaption class=\"caption\"><span>Source: RBI<\/span><\/figcaption><\/figure><br><strong>Future Initiatives and Strategic Vision<\/strong><br><br><div class=\"table-wrapper\"><table width=\"100%\"><tbody><tr><td><strong>Looking ahead, the RBI plans to expand the scope of its ongoing pilots in central bank digital currency-Retail (e₹-R) and Wholesale (e₹-W) in 2024-25.<\/strong><\/td><\/tr><\/tbody><tbody><\/tbody><\/table><\/div>This expansion will incorporate various use cases, new designs, and technological considerations, alongside the launch of a full-scale public tech platform involving more financial institutions and data service providers.<br><br>The RBI's Payments Vision 2025 document will continue to guide efforts in enhancing customer centricity, promoting innovation, and supporting the expansion of digital payment systems. The RBI's strategic initiatives aim to ensure the availability of banking services across all sections of society and strengthen the credit delivery system, particularly for agriculture and micro and small enterprises.<br><br><div class=\"table-wrapper\"><table width=\"100%\"><tbody><tr><td><strong>The RBI's Annual Report for 2023-24 underscores the transformative impact of digital payment innovations, with UPI leading the charge.<\/strong><br><\/td><\/tr><\/tbody><tbody><\/tbody><\/table><\/div>The RBI's Annual Report for 2023-24 underscores the transformative impact of digital payment innovations, with UPI leading the charge.According to the apex bank, these advancements highlight India's commitment to fostering financial inclusion, enhancing customer convenience, and maintaining robust regulatory measures to ensure a secure and efficient financial ecosystem. As digital payment systems continue to evolve, India's financial sector is poised for continued growth and innovation, it added.<br><\/body>","next_sibling":[{"msid":110554295,"title":"UPI QR transactions witness 18% rise at retail stores, AePS payments see surge in J&K: Report","entity_type":"ARTICLE","link":"\/news\/fintech\/upi-qr-transactions-witness-18-rise-at-retail-stores-aeps-payments-see-surge-in-jk-report\/110554295","link_next_mobile":"\/news\/fintech\/upi-qr-transactions-witness-18-rise-at-retail-stores-aeps-payments-see-surge-in-jk-report\/110554295?next=1","category_name":null,"category_name_seo":"fintech"}],"related_content":[],"seoschemas":false,"social_share":{"fb":"\/news\/fintech\/from-upi-to-e-rbis-annual-report-showcases-indias-digital-payment-advancements\/110559961?utm_source=facebook&utm_medium={{DEVICE_TYPE}}","x":"\/news\/fintech\/from-upi-to-e-rbis-annual-report-showcases-indias-digital-payment-advancements\/110559961?utm_source=twitter&utm_medium={{DEVICE_TYPE}}","whatsapp":"\/news\/fintech\/from-upi-to-e-rbis-annual-report-showcases-indias-digital-payment-advancements\/110559961?utm_source=wapp&utm_medium={{DEVICE_TYPE}}","linkdin":"\/news\/fintech\/from-upi-to-e-rbis-annual-report-showcases-indias-digital-payment-advancements\/110559961?utm_source=linkedin&utm_medium={{DEVICE_TYPE}}","telegram":"\/news\/fintech\/from-upi-to-e-rbis-annual-report-showcases-indias-digital-payment-advancements\/110559961?utm_source=telegram&utm_medium={{DEVICE_TYPE}}","copy":"\/news\/fintech\/from-upi-to-e-rbis-annual-report-showcases-indias-digital-payment-advancements\/110559961?utm_source=copy&utm_medium={{DEVICE_TYPE}}"},"msid":110559961,"entity_type":"ARTICLE","title":"From UPI to e\u20b9: RBI's Annual Report showcases India's digital payment advancements","synopsis":"The Reserve Bank of India's Annual Report for 2023-2024 showcases a digital payment surge, with UPI transactions hitting 13 billion in March 2024 and a 44.3% increase in volume. Key highlights include central bank digital currencies, payment system advancements, and international linkages, underscoring India's evolving digital financial landscape. 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The Reserve Bank of India's Annual Report for 2023-2024 showcases a digital payment surge, with UPI transactions hitting 13 billion in March 2024 and a 44.3% increase in volume. Key highlights include central bank digital currencies, payment system advancements, and international linkages, underscoring India's evolving digital financial landscape. Read here:

Sheersh Kapoor ,
ETBFSI

Updated On May 30, 2024 at 03:04 PM IST

Read by: 100 Industry Professionals

Read by 100 Industry Professionals

From UPI to e₹: RBI's Annual Report showcases India's digital payment advancements - ET BFSI (3)

The Reserve Bank of India (RBI) has released its Annual Report for 2023-24, highlighting remarkable progress in digital payment systems. The report underscores the pivotal role of the Unified Payments Interface (UPI) in transforming retail payments and the broader financial ecosystem.

The UPI platform achieved significant milestones in the fiscal year, surpassing 13 billion transactions in March 2024 alone. This rapid growth in UPI transactions reflects its widespread adoption and the increasing preference for digital payments among consumers. The decrease in the average ticket size further underscores UPI's role in facilitating small-value retail transactions, enhancing financial inclusion and convenience for users.

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The RBI's focus on innovation is evident in the introduction of several new payment solutions. The rollout of UPI-Lite, leveraging Near Field Communication (NFC) technology, is set to expand the ease of offline transactions. Additionally, the launch of 'Conversational Payments' enables users to initiate and complete transactions in a safe and secure environment, demonstrating the RBI's commitment to enhancing user experience and security.

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Expanding Digital Payment Infrastructure

The Bharat Bill Payment System (BBPS) continued its momentum, facilitating bill payments for over 21,000 billers through a vast network of digital and physical outlets. The system's extensive reach underscores its crucial role in the digital payments ecosystem, providing users with a reliable and convenient bill payment solution.

The RBI also made strides in enhancing the account aggregator (AA) ecosystem, which saw a ten-fold increase in newly linked accounts and consent requests.

This growth highlights the system's effectiveness in enabling secure and convenient data exchange, thereby improving access to financial products and services.Scope of Central Bank Digital Currencies

During 2023-24, the RBI conducted pilots with various use cases in central bank digital currency-Retail (e₹-R) and e₹-Wholesale (e₹-W) segments. The pilot in the e₹-R segment expanded to 15 banks and covered 81 locations, introducing interoperability with UPI to enhance user convenience. The e₹-W scope also grew to include interbank lending and borrowing transactions, alongside changes in technical architecture.

Global Connectivity and Trade Facilitation

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On the international front, the RBI enabled RuPay card and UPI connectivity between India and Mauritius, and between India and Sri Lanka. This connectivity aims to facilitate cross-border payments, enhancing trade relations and providing seamless payment options for import and export transactions.

Public Tech Platform for Frictionless Credit

In a bid to enhance efficiency, reduce costs, and streamline disbursem*nt, the RBI developed a public tech platform for frictionless credit (PTPFC). Launched in August 2023, this platform builds on pilots in digital kisan credit cards (KCC) and digital dairy projects, and aims to expand its scope to include more products, data providers, and lenders.

Regulatory Measures and Security Enhancements

To bolster security and customer confidence, the RBI extended the Central Payments Fraud Information Registry (CPFIR) to include local area banks, cooperative banks, regional rural banks, and non-scheduled urban cooperative banks. Additionally, a risk-based authentication mechanism is being introduced as an alternative to SMS-based one-time passwords (OTP), addressing risks in payment authentication.

From UPI to e₹: RBI's Annual Report showcases India's digital payment advancements - ET BFSI (4)

Future Initiatives and Strategic Vision

Looking ahead, the RBI plans to expand the scope of its ongoing pilots in central bank digital currency-Retail (e₹-R) and Wholesale (e₹-W) in 2024-25.

This expansion will incorporate various use cases, new designs, and technological considerations, alongside the launch of a full-scale public tech platform involving more financial institutions and data service providers.

The RBI's Payments Vision 2025 document will continue to guide efforts in enhancing customer centricity, promoting innovation, and supporting the expansion of digital payment systems. The RBI's strategic initiatives aim to ensure the availability of banking services across all sections of society and strengthen the credit delivery system, particularly for agriculture and micro and small enterprises.

The RBI's Annual Report for 2023-24 underscores the transformative impact of digital payment innovations, with UPI leading the charge.

The RBI's Annual Report for 2023-24 underscores the transformative impact of digital payment innovations, with UPI leading the charge.According to the apex bank, these advancements highlight India's commitment to fostering financial inclusion, enhancing customer convenience, and maintaining robust regulatory measures to ensure a secure and efficient financial ecosystem. As digital payment systems continue to evolve, India's financial sector is poised for continued growth and innovation, it added.