[Answered] Evaluate India’s performance in digital transactions compared to other developing countries. What steps can be taken to improve India’s performance?

Introduction: Give brief overview of digital transactions in India.

Body: Evaluate India’s performance in digital transactions compared to other developing countries and steps taken to improve it.

Conclusion: Way forward.

Digital payments are transactions that happen online or through other digital platforms without a physical exchange of money. This indicates that both the payer and the payee exchange money via electronic means. Studies have well documented that demonetization in November 2016 and the COVID-19 lockdown in 2020 were major push factors for the widespread adoption of digital payments. By 2026–2027, according to a recent report by PwC India titled “The Indian Payments Handbook – 2022–27,” UPI will reach a ground-breaking milestone of 1 billion daily transactions. During 2022-23, UPI accounted for 75 percent of the total transaction volume, signifying a massive shift towards digital payments.

India’s performance in digital transactions compared to other developing countries:

  • Data from MyGov India: India with 89.5 million digital transactions in the year 2022 has topped the list of five countries in digital payments, according to data from MyGovIndia. As per the data, in 2022, India accounted for 46% of the global real-time payments, adding that the digital payment transactions in India are more than the other four leading countries

 (Brazil, China, Thailand, South Korea) combined.

  • UPI: The success of UPI domestically has enabled countries like Bhutan and Nepal to launch UPI, from April 2023. Similarly, Singapore started cross-border payments between its national payments system PayNow and UPI.
  • Competition & Innovation: In India, there is fierce competition among a variety of companies, including banks, payment service providers, and fintech startups. The ongoing innovation brought about by this rivalry has led to the creation of user-friendly and secure payment solutions. Support from private players like Paytm, PhonepE, and Google Pay has popularised the concept of UPI.
  • Rural-Urban divide: India still has to go a long way in bridging the rural-urban gap in digital payments compared to nations like Bangladesh & Kenya. Only 30% of Indians in rural areas made or received any digital payment as compared to 45% in Bangladesh and 74% in Kenya.
  • Gender Gap: There is a sharp gender gap in digital transactions in India. The corresponding figure among women was only 28%, which is quite low as compared to Vietnam (44%), Brazil (73%), China (85%) and Kenya (74%), Bangladesh (34%).

Steps were taken to improve digital transactions:

  • Har Payment Digital’s mission: RBI launched a program that aims to adopt 75 villages and convert them into digital payment-enabled villages in observance of 75 years of independence.
  • Digital India program: The flagship program aims to transform India into a digitally empowered society and a digital economy. Under this program, the Government targets to promote digital payments and support the development of low-cost and easy-to-use digital payment solutions for all sections of society.
  • E-RUPI: This digital payment solution is a cashless and contactless instrument & is expected to play a huge role in making Direct Benefit Transfer (DBT) more effective in digital transactions in the country.
  • Digital Payment ecosystem: The ecosystem is characterized by schemes like JAM Trinity – Jan Dhan, Aadhaar and Mobile, Pradhan Mantri Jan-Dhan Yojana (PMJDY), Bharat Interface for Money-Unified Payments Interface (BHIM-UPI); Immediate Payment Service (IMPS); pre-paid payment instruments (PPIs), National Electronic Toll Collection (NETC) system National Electronic Funds Transfer (NEFT) and Real-Time Gross Settlement (RTGS) all of which have created a robust ecosystem for a digital finance economy.


Digital transactions have played a key role in the technological revolution in governance in India. As a result, government services have been made easily accessible & last mile delivery of government benefits has promoted financial inclusion as one of the important national objectives of the country.

Print Friendly and PDF