RBI Bulletin: India's digital commerce transactions grew 30% in 2021, up 760 bps than global growth rate

Retail payments expanded strongly across the payment modes, the RBI said.

India’s annual growth rate in digital commerce transactions has consistently been higher compared to global peers since 2018, data published in the Reserve Bank of India’s (RBI) bulletin for March 2022, released on March 17 showed. The COVID-19 pandemic and subsequent lockdowns may have further given a boost to digital payments across the country, as per experts.

In 2021, India’s digital commerce transactions grew 30 percent, 760 basis points higher than the global growth rate. Start-ups played a crucial role in shaping India’s digitalisation, the regulator said, adding that with 43 unicorn start-ups including 12 fintechs, India ranked third in terms of the number of start-ups joining the unicorn club in 2021, next only to the US and China.

“Digital payments continued to register robust growth in February and March 2022 (up till 11th March). Large-value transactions through the Real Time Gross Settlement (RTGS) sustained double-digit growth (y-o-y), both in volume and value terms in tandem with the economic recovery that is underway,” the RBI said.

“Retail payments expanded strongly across the payment modes. The Unified Payments Interface (UPI) sustained near 100 per cent growth in volume and value of transactions,” it added.

Despite the onslaught of the third wave of COVID-19, India’s consumer and business spending sustained traction and the average ticket size of card transactions exhibited a growth of 22.5 percent, the RBI said.

Due to improvements in cash flows of businesses with the ebbing of the third wave, NACH (National Automated Clearing House) debit bounce rates were down 23.4 percent in value on a yearly basis in January 2022. This may be indicative of a reduction in credit delinquency rate, the central bank noted.

Even as the pace of adoption of digital transactions has increased manifolds across the country due to cheaper data, ease of access and aggressive campaigns by lenders and new-age players to push credit, there has also been a steep rise in the number of digital frauds that happened in 2021 and continue to happen in the current calendar year, experts say.

As per RBI data, on an overall basis, a total of 4,071 fraud cases were reported by Indian lenders between April and September 2021 and the amount involved in these frauds was Rs 36,342 crore. During the corresponding period a year earlier, a total of 3,499 frauds amounting to Rs 64,261 crore were reported by lenders.