SMALL VALUE RETAIL DIGITAL PAYMENTS ON THE RISE: RBI REPORT

NEWS – RBI’s Report on Trends & Progress of Banking in India 2024-25 highlights a sharp rise in small-value digital retail payments, driven mainly by UPI.

 KEY FINDINGS OF RBI

 Strong Growth in Digital Payments

• Digital payments grew 17.9% in value
• Account for 97.6% of India’s total payments
• Cheque-based (paper) transactions declined
  • Now only 2.4% share

Volume Growth is Even Higher

• Digital payments volume increased by 35%
• Reflects massive adoption for small daily transactions

 Decline in Average Transaction Value

• Average value of digital retail payment:
  • ₹4,382 → ₹3,830
• Indicates:
  • More frequent small-value usage
  • Everyday retail and person-to-merchant transactions rising

 ROLE OF DIGITAL PLATFORMS

UPI — Dominates in Volume

• UPI accounts for majority share of transaction volume
• Used heavily for small payments, retail use, shops, services, P2P transfers

RTGS — Dominates in Value

• Real Time Gross Settlement (RTGS) holds largest share in value
• Used for high-value transactions
• Preferred by corporates, banks, financial institutions

 STRUCTURAL SHIFT NOTED

• Shift from cash/cheques → digital ecosystem
• Financial inclusion + fintech innovation
• Faster, convenient, low-cost payments
• Deep penetration into rural & semi-urban India