Digital money - “An emerging payment system in India”

Abstract

The development and adoption of the technology in the banking industry is considered to be the key to the growth of economy. India’s banking and financial sector is expanding rapidly with the potential to scale greater heights in the near future. In this context, this paper attempts gauge the growth of plastic money in India in the light of slew of measures undertaken by RBI and the government of India in order to make India a less-cash society. It is found that the digital payments have recorded impressive growth. As the debit card to credit card ratio stand at 27:1 the debit card appears to the most sought after one compared to credit card. Despite the fact that the credit card numbers have fallen, their usage at point of sale terminals have shown stupendous performance. However, the average use of debit card at ATMs account for almost 85% of the overall debit card transactions meaning debit cards are highly underutilized at Point of sale terminals. Further, found that in term of volume of transaction one-third happens through cards but in value terms ninety five percent of digital transactions among retail segment take place under the electronic fund transfers and the balance through card payments. The growth in card usage, electronic fund transfers and other channel attest the fact that the digital share of personal consumer expenditure continues to expand.