The internationalisation of the unified payments interface (UPI) is progressing rapidly, as India emerges as a world leader in leveraging digital technologies for transformative change, according to a Reserve Bank of India (RBI) report.
The UPI hit a milestone of 16.6 billion transactions in a month in October, with improvements in its capabilities like successful instant debit reversals at 86 per cent (77 per cent in the same month last year).
“India’s UPI, an open-ended system that powers multiple bank accounts into a single mobile application of any participating bank, is propelling inter-bank peer-to-peer and person-to-merchant transactions seamlessly,” said RBI Deputy Governor Michael Debabrata Patra in the report.
According to Patra, innovations in the digital credit landscape such as Account Aggregators, OCEN, and financial services on ONDC have also contributed to productivity gains.
As of March 2024, ONDC operates in over 720 cities, with orders at 49.72 million. The Trade Receivables Discounting System (TReDS) addresses the credit gap of MSMEs estimated at around Rs 52.2 trillion by connecting them with banks, and clients, with a reduction in funding costs up to 2.5 percentage points.
“The value of invoices financed through TReDS have surged more than 23 times. As of October 2024, around 5,000 active FinTechs are involved in providing various financial and technical solutions to businesses, including MSMEs, helping businesses better manage their operations and improve supply chain finance,” wrote Patra.
