RBI Digital Payment Index from 2018 to 2024

The index, set at a base value of 100 in March 2018, has shown remarkable and consistent growth over the six years. By March 2024, the index had reached 445.5, representing a more than four-fold increase in digital payment adoption and usage across the country. This substantial growth underscores India’s significant progress towards a less-cash society and embracing digital financial technologies.

The trajectory of the DPI reveals several interesting patterns. The growth was particularly steep in the initial years, with the index jumping to 153.47 by March 2019, indicating a 53.47% increase in just one year. This rapid initial growth suggests a strong push towards digital payments, possibly driven by government initiatives, technological advancements, and changing consumer behaviors.

The COVID-19 pandemic appears to have accelerated the adoption of digital payments. Between March 2020 and March 2021, the index surged from 207.84 to 270.59, marking one of the most significant year-over-year increases in the dataset. This spike likely reflects the shift towards contactless transactions and online shopping during lockdowns and a general aversion to handling physical cash due to health concerns.

Post-pandemic, the growth rate of the DPI has moderated but remained robust. The index continued to climb steadily, reaching 395.57 by March 2023 and 445.5 by March 2024. This sustained growth indicates that the shift towards digital payments was not just a temporary response to the pandemic but represents a lasting change in payment habits and financial infrastructure.

It’s worth noting that the DPI shows a consistent upward trend in both March and September readings each year, suggesting continuous progress without significant seasonal fluctuations. This steady growth points to ongoing improvements in digital payment infrastructure, increased consumer trust, and possibly supportive regulatory environments.

The most recent data point of 445.5 in March 2024 represents a 345.5% increase from the base period. This remarkable growth over six years highlights the transformative impact of digital payments on India’s financial landscape. It suggests widespread adoption across various sectors of the economy and potentially indicates improvements in financial inclusion and economic formalization.

In conclusion, the RBI’s Digital Payments Index paints a picture of the rapid and sustained digitalization of payments in India. From its inception in March 2018 to March 2024, the index has more than quadrupled, reflecting a significant shift in how financial transactions are conducted in the country. This trend will likely have far-reaching implications for India’s economy, including enhanced financial inclusion, improved transaction efficiency, and potentially reduced dependency on cash. As India continues to innovate in fintech, it will be interesting to observe how this index evolves in the coming years and what new milestones in digital payments adoption might be achieved.