Digital payments are increasing at a fever pitch in India, and banknotes continue to grow five years after the country demonetized banknotes of 500 and 1,000 rupees, according to a Monday (Nov. 8) report from The Times of India.
Digital payments via cards, net banking and the real-time payments system Unified Payments Interface (UPI) increased, while banknotes accounted for the lion’s share of currency methods in the last year, according to the report.
In November of 2016, Prime Minister Narendra Modi deemed banknotes of 500 and 1,000 rupees void in an effort to bolster digital payments, as the Hindustan Times reported.
According to Reserve Bank information, the value of banknotes in circulation nearly doubled from Nov. 4, 2016 through Oct. 29, 2021. From 2020 through 2021, the value and volume of banknotes in circulation had grown by more than 16% and more than 7%, respectively, according to The Times of India.
Digital payments are also growing by leaps and bounds in India. This spring, India-based Paytm announced that it had surpassed one billion monthly transactions in February, as PYMNTS reported. The company, which processes digital payments across 500,000 villages and provides training to upwards of two million merchants, said the volume of transactions was consistent with January.
See more: Paytm’s Monthly Transactions Climb to 1.2Bn
In addition to the surge Paytm saw, UPI had reported a monthly volume of more than two billion transactions earlier this year. By comparison, UPI’s transaction volume reached 1.34 billion in June 2020.
Read more: India’s UPI Hits 1.34B in June Transaction Volumes
The increase in digital payments is laying the groundwork for growth in the country’s digital lending volume, as well as the growing presence of FinTechs expected to work within both traditional and non-traditional financial services sectors, as PYMNTS reported.
Related news: FinTechs to Have Greater Presence in Charting India’s Digital Path
In January, the Reserve Bank of India said it was launching a Digital Payments Index to keep tabs on growth in cashless transactions. The index had been created with March 2018 as the base period. March 2020 and 2019 data showed a respective 207.8 and 153.4 growth measurement.
See also: India’s Digital Payments Soar; Reserve Bank Launches Tracking Index
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