The RBI released its “Payments Vision 2025” document on Friday which aims to triple the number of digital payments, increase the use of debit cards and reduce cash in circulation. The paper also discusses the siloing of national payment systems, including the need to mandate national processing of payment transactions, given emerging geopolitical risks.

The central theme of the vision papers is “Electronic Payments for Everyone, Anywhere, Anytime” (4E) with an overarching goal of providing every user with electronic payment options that are safe, secure, fast, convenient, accessible and affordable.

“Payments Vision 2025 has been prepared after considering input from various stakeholders and advice from the RBI’s Payments and Settlement Systems Regulatory and Oversight Council,” the central bank said in a statement.

Activities to be undertaken in the period up to 2025 under Vision 2025 are captured through five anchoring goals of integrity, inclusion, innovation, institutionalization and internationalization, did he declare.

They cover 47 specific initiatives and 10 expected results. Payments Vision 2025 builds on the initiatives of Payments Vision 2019-21.

According to the document, the expected results include a check payment volume of less than 0.25% of total retail payments and a more than 3x increase in the number of digital payment transactions.

He expects UPI to see average annualized growth of 50% and IMPS/NEFT at 20%, and an increase in point-of-sale debit card transactions of 20%.

It is also expected that debit card usage will overtake credit cards in value and card acceptance infrastructure will grow to 2.5 crore.

There would also be a reduction in cash in circulation (CIC) as a percentage of GDP.

The National Electronic Funds Transfer (NEFT) system is available 24 hours a day throughout the year and NEFT is currently operated in batches at half-hour intervals throughout the day.

“To further reduce settlement risk and improve efficiency by making payments near real-time, the batch frequency in NEFT should be reviewed and increased,” the document states.

Its specific initiatives also include the introduction of Payee Name Lookup, a payee real name verification service for other remittance systems such as NEFT, Real Time Gross Settlement (RTGS) and Immediate Payment Service ( IMPS).

Currently, only UPI allows the payer to verify and confirm the name of the paid account holder before making the payment.

He further stated that with the increasing adoption of digital payment methods, there is an increase in digital payment fraud.

Despite the efforts of stakeholders, the rate of recovery of defrauded sums is not very encouraging.

“In an effort to provide a security blanket to customers/issuers of defrauded payment instruments, a study on the scope/feasibility of establishing DPPFs will be undertaken,” the vision document states.

Currently, guidelines are in place for the national storage of payment data. Banks and non-bank PSOs are allowed to process payment transactions abroad under certain conditions.

“Bearing in mind emerging geopolitical risks, options will be explored to protect national payment systems, including the need to mandate national processing of payment transactions,” the document said.

The Reserve Bank would also undertake a comprehensive review of all fee-related aspects involved in various digital payments channels.

The possibility of extending RTGS to settle transactions in major trading currencies such as the dollar, pound and euro would also be explored through bilateral or multilateral agreements, he said.

Regarding central bank digital currencies, the document indicates that the CBDC has grown in popularity, with 86% of the world’s central banks examining its feasibility for cross-border transactions as well as internal benefits.

The CBDC is also an area of ​​focus for the G20 as part of its priority initiative to improve cross-border payments.

“Reserve Bank is working on introducing CBDC in India. Various use cases will be studied and explored to improve the efficiency of processing and settling domestic and cross-border payments using CBDCs,” he said. he declares.

More than 26 million digital payment transactions are processed daily by payment systems, of which the Unified Payments Interface (UPI) system itself processes more than two-thirds.