NPCI is currently in talks about a partnership with SBI Cards, BoB Cards, Axis Bank and Union Bank of India in the pursuit of a UPI platform links and is preparing a proposal for the RBI.
Cash usage continues to rise despite the increase in online transactions A top NPCI official on Friday stated that the circulation of money will decline only when three-quarters of the population is using electronic payment methods.
National Payments Corporation of India (NPCI) Managing Director and Chief Executive Officer Dilip Asbe stated that as of today, the total number of users of services like that of the U.P.I. Interface (UPI) is 250 million, which is about five percent of the world’s population.
“… unless one-third of the people both on the demand and supply side using access to the online payments structure, it’s very difficult to see an increase in cash circulation.” Asbe said while speaking at an event hosted by Bank of Baroda.
Based on the current increase that is currently taking place, he estimated it would take between 12 to 18 months to see the cash to be withdrawn from circulation.
In the past few months, high currency in Circulation (CIC) was confusing industry watchers as official data has shown an increase in digital transactions made through platforms like UPI.
CIC has increased to more than fourteen percent of GDP compared to twelve percent when it was a part of demonetisation.
Asbe explained that it’s an “complex scenario” He also pointed out that despite the transfer of funds to bank accounts of people through Direct Benefit Transfer program, many customers cash out at ATMs. Teller Machines (ATMs). In addition, the use of “rolling cash” has been increasing at ATMs as well as the point of sale transaction’s average size of tickets.
In advanced countries He said that in developed countries, CIC as an amount of GDP is single figures, and given everything we have done and the awareness and education campaigns “we ought to aim at getting the CIC to drop to single digits within 5 years time”.
Asbe stated that there will be a 10x growth in the volume of transactions and Indians will process one billion digital transactions within a single day.
In the coming years, RuPay credit cards will be connected with UPI. UPI platform.
NPCI is in discussions regarding SBI Card, BoB Cards, Axis Bank and Union Bank of India regarding the same. It will also present a proposal to Reserve Bank of India (RBI) to take forward the policy announcement regarding this UPI front.
“We could be required to manage the smaller businesses and shield them from MDR (Merchant Discount Rate) while existing credit card-related merchants continue to make payments,” he said.
UPI transactions, conducted until recently, and tied to savings bank accounts, are now free under the law, while credit card holders are permitted the right to deduct up to 2 percent from the transaction as MDR that is payable by the merchant.
Asbe stated that NPCI is currently in talks with more than 30 countries, from an internationalisation UPI view, which includes as well helping countries establish their own payment networks, and making cross-border payments more convenient through the platform.