India lags on per capita digital transactions, but is on the track

A useful metric to measure the growth of digital transactions is per capita data. Our metric has shown a significant growth – to 22.42 digital transactions per capita at close of FY19 from 2.4 such transactions in  FY14. 

The Nandan Nilekani report on Deepening of Digital Payments says this metric can grow by a factor of 10 in three years; and the authorities should aim for 220 by FY21. Even so, we would still trail Singapore’s standing on this aspect at 782 in calendar 2017, Sweden at 497.9, the US at 473.6; and only be ahead of the Eurozone at 186.8.

That’s a lot of catching up to do.

An aspect highlighted in the report is the number of unique digital users we have per month – it is not easy to find this out with the current system. On its part, the committee estimates the total number of unique digital users at approximately 100 million a month. Better seeding of the population with digital modes of payments will reduce the currency in circulation (CIC). We have a large CIC/GDP ratio. Even after demonetisation, it has bounced back rapidly though not to the same levels as would be predicted by GDP growth rate and inflation.