In the past few years, the Indian government has made a concerted effort at making digital payments ubiquitous. For those living in the big cities, the proliferation of digital payments has reached significant proportions.
Despite some genuine concerns surrounding the security of private data, digital payments in India has made real progress.
This progress is reflected in a global report published by the US-based financial services technology giant Fidelity National Information Services (FIS), which has rated India’s digital payment systems above the ones prevalent in China, Japan and the UK.
Leading the charge for India is the immediate payment service (IMPS), which has earned a rating of 5 from the Fidelity report titled ‘Flavors of Fast, 2017.’
The rankings are based on a scale of 1 to 5 on its faster payment innovation index (FPII). As per the report, 1 equals to “meets base required features only,” while 5 refers to those payment systems that meet many features and maximise customer value.
“Out of the countries assessed, India’s IMPS was the only system across the world performing at level 5. Taiwan was at level 1, Mexico, Brazil, Ghana, Nigeria, Iceland, China, Korea and Sri Lanka were assessed at level 2,” said Ramaswamy Venkatachalam, FIS’s regional managing director, India and South Asia, to Mint.
To the uninitiated, the IMPS is an instant interbank electronic fund transfer service through mobile phones and internet banking applications. The payment system has proven to be safe and economical for both merchants and consumers.
The report also goes on to highlight the growing popularity of the Unified Payments Interface (UPI), which has furthered the IMPS model. It is a digital payments system developed by the National Payments Corporation of India and regulated by the Reserve Bank of India.
“UPI is a system that powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless fund routing & merchant payments into one hood,” says this government website.
“It also caters to the “Peer to Peer” collect request which can be scheduled and paid as per requirement and convenience.”
In its report, FIS has highlighted how UPI has successfully managed to allow the direct integration of payments with external business applications.
“UPI is proving that open access central to innovation and is also a strong driver of adoption. The introduction of UPI in August 2016 led to the creation of a wealth of new innovative payment solutions,” the report elaborated.