The Cost Of Digital Payment Declines

The cost of digital payment declines

It’s Saturday morning 11 am and I’ve just given up on “payment transfer” after trying four times to do a simple payment transfer through internet banking. I’ve repeatedly initiated the transfer, but I am just not getting the “OTP” on SMS. I’ve tried the option of “OTP” on email and failed. My internet connectivity is excellent, and mobile network connectivity is perfect. As a network engineer, I can rule out “user end” issues but as a customer, I am not happy with the bank – I have wasted 30 minutes of my time without succeeding with something as simple as a payment transfer.

This whole episode has gotten me curious – what are the failure rates of Digital payments in India? Time to explore the NPCI website…

Growth in India Digital Payment

The data on growth of digital payments in India is just stunning – based on the December 2020 data, the number of UPI transactions is 2.234 Billion, and the amount is 4,16,176 Cr, with year-over-year growth of more than 105% from 2,02,521 Cr in December 2019! Even the venerable IMPS shows transactions year-over-year (December 2019 to December 2020) growth to be more than 35%!

As digital payment transactions continue to grow in the coming years, end-customers expect the digital payment process to become simple, secure and faster with no failure, for which the fintech companies, banks and regulators have to ensure that the technology, processes and governance has to be scalable, effective and efficient to handle the enormous growth we will be witnessing.

IMPS No. of Member Banks No. of Transactions (in M) Amount (in Cr.)
Dec-20 620 355.69 2,92,324
Dec-19 559 256.47 2,10,934
Growth % 11% 39% 35%


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