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RBI’s latest data on digital transactions does not give a complete picture


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The Reserve Bank of India has released data on digital payments for the month of November 2016, and has said that it will release this data every day from here on. There has been some speculation that there has been a decline in even digital transactions month on month after demonetization: This is not true because the data being released in not comparable with the previous months: It’s important to note that only the IMPS and UPI data is comparable with historical data, which we’ve shared in our Digital Payments report here, because in case of Debit and Credit cards, the data is for 4 banks only (the RBI hasn’t specified which banks), and for Prepaid Payment Instruments (Wallets), it is only for 8 wallets (again, no clarity on which wallets). For the wallets, the data is limited to Goods and Services transactions only, which means that it ignores a critical use case of Mobile Wallets, which is money transfer. Also note that the data for December 2nd is provisional, and will be updated soon.

There are 48 wallets in operation, according to the RBI’s latest data.

Among them, Paytm had claimed 70-90 million monthly transactions in September this year, and more recently, said that the average transactions had increased 3X of average in November.

Note that as per RBI data, for November, there were 59 million transactions for goods and services on 8 wallets. For the month of August, the total number of transactions on wallets were 96.8 million, according to RBI data. 

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There was a sharp decline in IMPS transactions in the Month of November. As per provisional data released by the National Payments Council of India to the Reserve Bank of India, IMPS Transactions declined by 23.58%, while the amount transacted declined by 14.16%. Now we’ve seen comments attributing this to a decline in payments post Diwali, but realistically, IMPS transactions have only declined twice in the last two years (data in the chart below), and the last one a year ago, by 2.26%. The amount transacted has been increasing each year, month on month. A 14.16% decline is substantive, given that the last such decline was 2.06%, in June 2015. It is, of course, possible that there has been a switch in payment mechanism.

Note that this was also the highest jump in average amount per transaction (to Rs 8980.07), up 12% from October 2016, a jump which is unprecedented, at least over a two year period.

imps-chart-nov-2016

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  • sketharaman

    AFAIK, UPI is a consumer-facing frontend that uses the IMPS rails for processing payments. That being the case, how should we interpret the figures for IMPS and UPI reported separately: Double-counting or “IMPS, of which UPI”?

    • Shashidar KJ

      Valid point. Will try to clear that up with the NPCI.

  • sketharaman

    Also, any idea why NEFT is missing? I know NEFT & RTGS are from RBI and IMPS & UPI are from NPCI but (1) NPCI is a wholly-owned subsidiary of RBI and (2) I know for a fact that many people use NEFT for making P2P and P2B payments, both of which are considered retail payments. As a common man interested in tracking retail payment figures, I do find NEFT to be conspicuous by its absence.