The payments landscape is changing fast in India. Technology, economic growth and regulation are contributing to reshape the market. On the regulatory front, the Reserve Bank of India (RBI) has been “proactively encouraging electronic payments for ushering in a less-cash society”.
One key step has been the establishment in 2008 of the National Payments Corporation of India (NPCI) – an umbrella organisation for all retail payments. The NPCI is responsible for the operation of various retail payment systems such as Rupay, the card payment scheme, the Bharat Bill Payment System as well as IMPS the Immediate Payment Service launched in 2010 and which provides a real-time, interbank electronic fund transfer system across mobile devices, internet and ATMs. According to NPCI metrics, almost 30 million transactions were settled using IMPS in March 2016.
In spite of these developments, cash demand is continuing to grow. According to an RBI report published in March and entitled Concept Paper on Card Acceptance Infrastructure, ATM withdrawals account for 90% of the total volume of debit cards transactions and approximately 95% of the total value. Between October 2013 and October 2015, the number of POS terminals increased by 28% whereas the number of ATMs grew by around 43%.