Commenting on the RBI Monetary Policy, Sarvatra Technologies Managing Director & Vice Chairman, Mandar Agashe said, “This year interestingly, despite record purchase transactions during Diwali, cash in circulation did not increase, a rare occurrence since 2014 indicating – digital payments have become the mode of choice for masses.”
“Considering more than 50% of the transactions conducted on UPI are of value below Rs 200, low-value transactions, there is significant utilization of system capacity and resources, leading to customer inconvenience owing to connectivity issues and transaction failures. Therefore enabling small value transactions through an ‘On-device’ wallet in UPI app will not disturb the banking system every time a transaction is conducted, which will help conserve banks’ system resources,” Mandar said.
“Additionally facilitating UPI-based digital payment solutions on feature phones will promote wider digitization offering a quantum leap in driving small value transactions especially in tier II, III markets. Today UPI is the single largest retail payment system in the country and has risen by almost 70 times in the last 4 years growing into an institution itself,” he added.
Further speaking on the monetary policy, Mandar added, “Therefore as the industry has matured the current move of upscaling the transaction limit for payments from 2 lakh to 5 lakh will help encourage retail investors to comfortably indulge in high-value transactions such as Retail Direct Scheme and IPO applications.”
Additionally, the paper seeking feedback on issues related to charges applicable on digital payments will further drive collaboration among stakeholders to resolve challenges and take timely measures to make digital transactions affordable to end-users and economically remunerative for service providers.