2025, Vol. 7, Issue 2, Part B

author(s)
Jyotirmoy Koley

abstract
The digital payment landscape in India has experienced a significant transformation driven by technological advancements, government initiatives, and evolving consumer behaviour. This study offers a comprehensive analysis of the evolution and current state of digital payments in India from 2017-18 to 2024-25. During this period, transaction volume increased substantially by 15.2-fold, with a compound annual growth rate (CAGR) of 699%. The transaction value more than doubled with a CAGR of 1,371%. The Reserve Bank of India's Digital Payment Index rose consistently from 100 in 2017-18 to 493.22 in 2024-25. The key drivers of this growth include the adoption of the Unified Payments Interface (UPI), government initiatives such as Digital India and demonetization, the impact of the COVID-19 pandemic, and fintech innovations. Trends indicate faster volume growth compared to value, suggesting a shift towards smaller, more frequent transactions. Financial inclusion has been enhanced, particularly in rural areas, through mobile money and digital wallets. The study also highlights challenges, such as the digital divide, infrastructure limitations, trust and security concerns, and regulatory hurdles. Future prospects include the potential impact of Central Bank Digital Currency (CBDC) and the continued expansion of digital payment systems. This transformation in India's payment landscape has significant implications for financial inclusion, economic growth, and the broader fintech ecosystem.